MANILA, Philippines - Manila Electric Co. (Meralco), the country's largest power distributor, is expanding its business abroad for the first time through a Singapore $600-million acquisition of Singaporean power firm.
In a statement late on Monday, Meralco said it has agreed to join Hong Kong's First Pacific Company Ltd., "to take a 70 percent interest together in a Singapore power project using a joint venture company formed for this purpose."
The units of First Pacific and Meralco formed FPM Power Holdings Ltd. (FPMP), which entered into a share purchase deal with GMR Infrastructure (Singapore) Pte. Ltd. and GMR Infrastructure Ltd. (GMRIL).
FPMP will spend S$600.006 million (approximately US$488 million) plus foreign exchange adjustments to buy out GMRIL's entire 70-percent share in GMR Energy (Singapore) Pte. Ltd.
GMR Energy is in the advanced stage of building a 2x400-megawatt (MW) liquefied natural gas (LNG) power plant in Jurong Island, Singapore.
"Meralco Powergen's participation in the joint venture is an expression of Meralco's long-term vision to be a regional player in the power industry," said Meralco chairman Manuel V. Pangilinan.
"It is anticipated that the investment shall be income-accretive to the Philippine economy and to Meralco," Pangilinan said.
The investment complements Meralco's existing greenfield project developments in the Philippines, said Meralco president and CEO Oscar Reyes.
GMR Energy's facility is expected to start commercial operations in December 2013. The power plant's output has been contracted to SP Power Assets Ltd., the retail market and merchant supply operations.
Pangilinan said the joint venture is expected to provide LNG combined cycle power plant technology transfer to our country.
Meralco is planning to build a 1,500-MW LNG-fired and a storage and regasification facility in partnership with a leading Japanese utility.
Core income of Meralco, the country's largest power distributor that is also looking at Myanmar, Thailand and Vietnam, jumped nine percent to P16.265 billion last year.