MVP to fortify hold on Meralco with purchase of Tanco stake

MANILA, Philippines - The group of telecommunications magnate Manuel V. Pangilinan is moving to further fortify its hold on Manila Electric Co. (Meralco) with the impending purchase of the four percent stake held by STI owner Eusebio Tanco in the country’s largest power retailer.

Pangilinan said Tanco has agreed to sell his  stake in Meralco to  Metro Pacific  Investments Corp. (MPIC) but  pointed out that the terms of the deal have yet to be threshed out. “They have agreed to sell to us but there’s no price yet,” he said.

Tanco’s stake, involving around 45 million shares, is worth P7.83 billion based on the closing price of Meralco shares yesterday. The shares were acquired by his group’s pre-need unit PhilPlans from the Government Service Insurance System (GSIS) earlier this year at P197 each.

The acquisition of  these additional shares will raise the Pangilinan-led group’s  holdings in Meralco to more than 45 percent.

In previous interviews, Pangilinan had said his group’s ultimate goal was to gain more than 51 percent of the power firm.

The group has accumulated billions of pesos worth of Meralco shares in the open market and from the Lopez family, whose stake in the power retailing firm is now down to 6.7 percent.

Pangilinan will assume the role of president and chief executive of the country’s largest electric distributor beginning July 1.

In another development, Pangilinan said they are contemplating on backing out of the consortium seeking to operate Manila North Harbor privately for next 25 years if they could not get majority control of the Manila North Harbour Port Inc. (MNHPI).

MNHPI, a joint venture between the Romero family’s Harbour Center Port Terminal Inc. and MPIC,  obtained in October the right to operate and manage Manila North Harbor, the country’s busiest domestic port with its bid of P14.5 billion. The turnover, originally slated for January, had been postponed several times the past three months following reported opposition from ship liners, cargo handlers and labor groups.

MNHPI was formed in 2007 to bid for the ports operations, but that was derailed when other bidders were disqualified and port unions demanded that the government hold a new bidding.

The Philippine Ports Authority subsequently suspended the process, forcing the consortium to ask the Manila Regional Trial Court (RTC) to push for the privatization process of North Harbor.

Manila North Harbor, which handles more than 85 percent of the domestic containerized and breakbulk cargo, is expected to give a rate of return of 25 percent.