Metro Pacific to secure P4.5-billion bridge financing

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) is securing P4.5 billion in bridge financing from local banks using some of its recently acquired shares in the Manila Electric Co. (Meralco) as security.

MPIC’s board of directors authorized yesterday the availment of financing from Metrobank and Philippine National Bank as well as the constitution of a pledge over a total of 13.35 million Meralco common shares. The purpose for the bridge financing was not disclosed.

MPIC earlier announced it is acquiring for P14.28 billion the 13-percent stake in the Meralco currently owned by the PLDT Beneficial Trust Fund (BTF), New Gallant (10.17 percent) and Crogan Ltd. (2.83 percent) even as it revealed plans to acquire more shares in the power distribution utility.

MPIC said it continues to assess suitable opportunities to develop and maintain its position as a strategic shareholder in Meralco.

“MPIC further intends, should suitable opportunities arise, to continue to acquire further shares of Meralco so as to develop its position as a strategic shareholder with appropriate board and management participation,” MPIC president and CEO Jose Ma. Lim said.

To partially finance the P14.28 billion acquisition, MPIC is issuing around 2.7 billion of its common shares valued at P9.5 billion constituting 14.5 percent of MPIC’s outstanding capital stock in favor of BTF and another 742.5 million shares worth P2.6 billion (3.98 percent of total) in favor of Metro Pacific Holdings Inc. (MPHI), currently the majority stockholder of MPIC.

With the issuance of shares to BTF and MPHI,  MPIC’s total outstanding shares of 15.2 billion will increase to 18.66 billion with a total capitalization of P34.85 billion. BTF shall become a significant shareholder of MPIC holding 14.5 percent or an effective economic interest of 19.8 percent while MPHI will reduce its shareholdings in MPIC from 93.5 percent (economic interest of 90.3 percent) to 80.2 percent (72.95 percent economic interest). The issuance is expected to strengthen MPIC’s capital base.

MPIC’s net income for the first quarter of 2009 grew  nearly three times in the first quarter to P552 million compared to P138.5 million in the same period in 2008.

Core net income was at P356 million, nine times higher than the P38 million recorded in 2008.