MANILA, Philippines - The absence of Manila Electric Co. chairman Manuel ‘Manolo’ Lopez and ABS-CBN Broadcasting Corp. chief executive officer Eugenio ‘Gabby’ Lopez III at First Philippine Holdings Corp.’s annual meeting yesterday has fuelled speculations that what used to be a tightly-knit family is no longer solid.
Both Manolo and Gabby sit on the board of FPHC. However, Jay Lopez, vice-president for FPHC’s corporate communications department and a member of the Lopez family, said Gabby was out of town.
Elpidio Ibanez, president and chief operating officer of FPHC, said Manolo “could already be preparing for the Meralco meeting” scheduled today.
Manolo was earlier reported to have a fallout with elder brother Oscar, the patriarch of the Lopez clan, due to the family’s sale of a substantial stake in Meralco to the PLDT group in March. A few days after the sale was published in the newspapers, Manolo came out, pointing out that he apparently had been left in the dark as he knew about the agreement only after it had been finalized.
Industry observers said the rift between the two Lopez brothers started last year when the Lopez family and Government Service Insurance System head Winston Garcia were embroiled in a battle for control of the country’s largest power utility firm. Manolo was abroad during the proxy war between the Lopez family and the government, leaving Oscar to face his detractors as the clan fought to retain management control of the power retailer.
Oscar, himself, admitted that the sale of 20 percent of the Lopez family’s 34.7 percent stake in Meralco last March 13 was not easy on younger brother Manolo, who has invested more than 30 years of his life with the company.
The Lopez patriach, however, pointed out that the divestment was a business decision they needed to make no matter how painful and difficult it was and meant to ensure the survival of Meralco amid a global financial downturn.
“We feel that divesting a 20 percent interest in Meralco to the PLDT Group, we have forged a strategic alliance that will enable us to continue to participate, both as owners and business partners, in a Meralco whose value has been greatly enhanced by the possibilities of synergy with PLDT,” Oscar said in his speech before FPHC shareholders yesterday.
“From being the country’s dominant distributor of electricity, Meralco now has the potential to become a participant in the wires platform for multi-media products in the broadband world of tomorrow,” Oscar said.
He also stressed that the sale has put Meralco in a stronger position and “carries a silver lining over and above providing us cash to settle our debts and to take advantage of investment opportunities.”
“It also liberates us from a Catch22 strategy of having to defend our position in Meralco at all cost, a battle that we could not possibly win under the current domestic political and global financial environment. This will not be a case of having to go down with a sinking ship or fighting till the last man is down,” Oscar said.
“If Meralco is able to seize upon the synergistic opportunities that it has been presented, then we stand to realize as much value, if not more, from our remaining 13.4 percent stake than if we had tried to defend our 33.4 percent stake,” he said.
Ibanez said the Lopez group is still open to selling more shares in Meralco “ if there are attractive offers. “
Meralco will be at the center of attention today with three of its major shareholder groups facing off for the first time at its annual general meeting this morning.
Meralco’s annual shareholders meeting remains the hottest ticket in the local corporate world given the high profile battle for control of the country’s largest power retailer.
The Lopez family patriarch admitted that the battle for control of Meralco only stressed that for the power retailer to be profitable, it will need “government support.”
“Investing in a vital, influential and publicly- regulated business in our country inevitably requires government support. If that is missing, then it weakens the business model,” he said.
He added: “With and San Miguel Corp. as major players in Meralco, I hope that this weakness can be better addressed.”
Oscar Lopez, in a strong and sentimental speech to stockholders almost the same time last year, blamed the government for its woes. He said the attacks against the family is a “diversionary scapegoat in order to deflect attention away from the many problems and issues that our people face, and on which their leaders have failed them utterly.” He added that the Lopez’s media arm, ABS-CBN, which showed “dogged determination...to expose the truth of our everyday lives,” as another reason for the attacks.