MANILA, Philippines - Manila Electric Co. accounted for more than four-fifths of total trades at the local stock market yesterday, with around P19.11 billion worth of shares crossed through a series of special block sales to facilitate Metro Pacific Investments Corp.’s acquisition of shares in the country’s largest power distributor.
In a disclosure to the Philippine Stock Exchange, MPIC said it acquired a total of 144.385 million Meralco shares at P126 each. Of the total shares, 113.313 million, representing 10.17 percent of Meralco, will be purchased from the PLDT Beneficial Trust Fund while 31.072 million will be bought from Crogan Ltd. At the same price.
BTF is the retirement fund established for the benefit of employees of the Philippine Long Distance Telephone Co. (PLDT), the local telecom unit of Hong Kong-based conglomerate First Pacific Co. Ltd., while Crogan is an affiliate of First Pacific.
The purchase price for the shares will be paid by MPIC in cash.
Another block sale was implemented yesterday involving 3.96 million shares of Meralco valued at P917.22 million.
Meralco closed P10 or 6.02 percent higher yesterday at P176 each share on volume of 460,670 shares worth P80.48 million.
MPIC expects to raise up to P14.31 billion through an offering of shares to partly fund the purchase of Meralco shares and its proposed investment in a tollways projected located south of Metro Manila.
The first step of the group’s fund-raising scheme involved the sale by Metro Pacific Holdings Inc. (MPHI), the principal shareholder of MPIC, of 4.15 billion common shares at P3 each, a 36.8-percent discount on the closing price of MPIC shares at the Philippine Stock Exchange on Sept. 18, 2009, the last trading day of MPIC shares before pricing of the offer shares.
The placement agreement that MPIC signed with CLSA Singapore Pte Ltd and UBS AG, provides for an over-allotment option of an additional 620 million common shares of MPIC held by MPHI.
These shares will also be at P3 apiece.
The second step, on the other hand, entails the subscription by MPHI and issuance by MPIC to MPHI, of new common shares in the same number and at the same price as the shares sold during the first stage, with such new common shares being listed as soon as practicable thereafter.
MPIC has set aside up to P7 billion of the total proceeds of the offering for cash acquisition costs of the 148.35 million common shares of Meralco to be acquired from BTF and Crogan.
Another P4.8 billion has been allotted for repayment of short-term borrowings, which were made mainly to cover the purchase of Meralco shares in open market purchases.
The remaining proceeds from the sale will go to Metro Manila Skyway System, an elevated highway crossing over the existing South Luzon Expressway.
MPIC president Jose Ma. K. Lim said the actual allocation of the net proceeds will depend on various factors including the consummation of the acquisitions of common shares of Meralco, MPIC’s proposed investment in the Skyway project, market conditions, the availability of suitable opportunities, the timing of regulatory approvals and other factors.
Lim said MPIC could use the net proceeds to invest in other infrastructure projects or assets in the Philippines or for general corporate purposes.