San Miguel raises P17 B in shares sale

MANILA, Philippines - Conglomerate San Miguel Corp. has sold 64.3 million of its shares in the Manila Electric Co. (Meralco) for more than P17 billion to a group of investors led by businessman Manuel Pangilinan.

The shares sold represent roughly five percent of the 32.8 percent stake of San Miguel in Meralco. Pangilinan told The STAR that his group, which includes infrastructure conglomerate Metro Pacific Investments Corp. (MPIC), took up 15 to 16 percent of the placement size, further enlarging its dominant stake in Meralco.

MPIC is the single largest shareholder in Meralco with a 48.3 percent interest through wholly owned subsidiary Beacon Electric Asset Holdings Inc.

In a disclosure to the Philippine Stock Exchange yesterday, San Miguel said the shares were sold for P270 each or a 10.71 percent discount from Thursday’s closing price of P302.40. Deutsche Bank AG and Standard Chartered Securities (Singapore) Pte. Ltd. managed the sale.

San Miguel acquired its Meralco stake five years ago for around P90 per share or just a third of the power firm’s current stock price.

The Government Service Insurance System, the country’s largest pension fund, reportedly bought a significant chunk of the offered shares, which represent 5.7 percent of the power firm, sources said.

Pangilinan said the purchase signifies the group’s confidence in the power sector, particularly in Meralco, which serves about a quarter of the nation’s population.

Pangilinan earlier said the group was open to increasing its stake in Meralco as long as the purchase would not trigger a mandatory offer for the remaining shares of the power retailer.

Under the Securities Regulation Code, any entity that acquires more than 51 percent of a listed company must offer to buy the remaining shares held by minority investors for the same price.

In a text message, San Miguel president Ramon Ang said proceeds from the share sale would be used to fund the group’s infrastructure projects offered under the government’s public-private partnership program.

A unit of San Miguel, Optimal Infrastructure Development Corp., bagged the P15.5-billion Ninoy Aquino International Airport Expressway project.  Construction of the tollway that will connect the three terminals of NAIA is targeted for next year and slated for completion by August 2015.

The NAIA Expressway is the third PPP project auctioned off by the government after the P1.96-billion Daang Hari-SLEX Link and the P16.42-billion school infrastructure project phase 1.

Ang earlier said the conglomerate was divesting some of its assets to bankroll its aggressive expansion plans, particularly in the power sector and in the airline business. It needs around $4 billion to fund its power expansion initiatives.