Lopez clan retains control of Meralco

MANILA, Philippines - Manuel “Manolo” Lopez yesterday retained his seat as chairman of the country’s power utility giant Manila Electric Co. (Meralco) as the heads of its two new major investors – San Miguel Corp. (SMC)’s Ramon Ang and Philippine Long Distance Telephone Co. (PLDT)’s Manuel Pangilinan – pledged their support to the Lopez management.

There were no fireworks at the jampacked Meralco annual stockholders’ meeting yesterday, unlike last year when it took the board more than 11 hours to adjourn the meeting.

The 2008 annual meeting of Meralco was marred by controversy when one of its directors, Government Service Insurance System (GSIS) president Winston Garcia, tried to oust Manolo Lopez from the power utility’s board.

There were rumors going around before yesterday’s annual meeting that the SMC group would try to wrest management control of Meralco.

But both Ang and Pangilinan told a press conference after the stockolders’ meeting that they were committed to help Lopez in his efforts to bring down power rates which will redound to the benefit of its customers.

Meralco vice president and corporate marketing head Miguel Lopez described the conduct of the meeting as “very orderly and professional.”

Aside from Manolo, the other members of the new board of Meralco are: Ang (vice chairman); Jose de Jesus (president and COO); Pangilinan; Napoleon Nazareno; Ray Espinosa; Estelito Mendoza; Mario Surio; Alan Ortiz; and independent directors Vicente Panlilio and former chief justice Artemio Panganiban.

Other elected corporate officers were: Simeon Ken Ferrer (corporate secretary and compliance officer); Betty Sy (chief finance officer); Ricardo Buencamino (executive vice president and head of networks); Leonisa de la Llana (senior vice president, head of human resources and corporate services); and Rafael Andrada (first vice president and treasurer & OIC information disclosure officer).

“The coming together of these three top business organizations (Lopez Group, SMC and PLDT) can be regarded as a momentous event in Philippine history. The proven track record of these three leading business groups, who share the same passion for quality service to customers, will definitely redound to the benefit of electricity consumers. This historic alliance is a clear manifestation that business groups can be united in the pursuit of a common goal to provide good customer service,” Lopez said.

“We have utmost respect for the Lopez family and Pangilinan, so we will try to do our best to look for something to do together, and we are in support of the management of Manolo Lopez in Meralco,” Ang said.

“As long as Manolo stays, our investment will stay. We are very lucky to have a chance to work with Manolo and Manny Pangilinan. Manny Pangilinan is a real gentleman. We talked for the last several months about investment in Meralco and he gave us due respect, and so we reciprocated a very nice arrangement with him, and so today the three groups are in control of Meralco.”

Ang said SMC has been known for being a “straightforward” company.

“San Miguel is known to be a straightforward company. Hindi kami gagapang o mananaksak. Hindi namin gagawin yun kahit kailan. (We will not be sneaky or stab anyone in the back. We will never do that.) You can always remember what I said, we are here to support Manolo and MVP (Pangilinan),” the SMC chief said.

On the issue of whether the Lopez family has plans of further divesting their shares in Meralco, Manolo said its parent firm, First Philippine Holdings Corp. (FPHC), has the say on this matter.

FPHC chairman Oscar Lopez had explained in his report to FPHC stockholders that they have divested 60 percent of their equity interest in Meralco, amounting to 20 percent of the outstanding shares of the utility, to be consummated on or before August. 

In his speech at the FPHC stockholders’ meeting the other day, the Lopez patriarch said, “We feel that in divesting a 20 percent interest in Meralco to the PLDT group, we have forged a strategic alliance. 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 tomorrow. You may one day see Meralco as your principal source, not only of electricity, but of the many sustaining elements of our everyday lives that we ascribe value to – interactive communications, news, information, education and entertainment.”

But Manolo admitted that there was an agreement between FPHC and the PLDT group for a right of first refusal.

“I think there is such a provision in the agreement between FPHC and PLDT,” the Meralco chairman said.

Pangilinan, reacting to this issue, said the provision (right of first refusal) is not new in business transactions.

“This (right of first refusal) is not something new. This will just allow us or FPHC to buy each other’s shares just in case one of us decides to divest,” the PLDT executive said.

The three groups now running Meralco have assured stockholders that they would apply strategies that would lower prices of electricity.

“With the entry of MVP, I tell you, we will do our best to make our electricity sector the ‘greatest’ again in Southeast Asia,” Ang said.

Lopez said the new board will have its first meeting on June 29 to draw up a strategic plan for Meralco.

As of now, Lopez said, they have yet to firm up specific strategies on how to further improve Meralco’s services and performance.

Meanwhile, Meralco declared a cash dividend of P1 per common share in favor of stockholders on record as of June 9, 2009, payable on June 30, 2009.