GSIS eyes DOF stake in Semirara

MANILA, Philippines — State-run Government Service Insurance System (GSIS) could end up buying the Department of Finance (DOF)’s stake in Consunji-led Semirara Mining and Power Corp. (SMPC).

SMPC chairman Isidro Consunji told The STAR that GSIS is interested in acquiring the DOF’s shares in the listed integrated energy company.

Last week, Finance Undersecretary and chief economist Domini Velasquez said the DOF is planning to unload its 145.6 million shares in SMPC in a bid to boost its non-tax revenues through privatization.

The shareholdings, which are held by the Privatization and Management Office, an attached agency of the DOF, represent a 3.4-percent stake in SMPC.

“That has always been part of the public float,” Consunji said.

SMPC’s current free float level is at 24.23 percent.

Shares of the company closed at P32.95 last Friday, lower by 1.20 percent from the previous day. At this price, the government’s stake in the company would amount to about P4.8 billion.

Current shareholders of the company will not have the right of first refusal on the planned sale of the government’s stake, another company executive said.

SMPC VP and CFO Carla Cristina Levina told The STAR that the integrated energy firm’s articles of incorporation (AOI) do not provide pre-emptive rights or right of first refusal on the disposition of shares.

The right of first refusal would have given the existing stockholders the opportunity to acquire the government’s shares at a specified price before being offered to outside buyers.

However, Clause 10 of SMPC’s AOI states that “no stockholder shall have the right to subscribe to or purchase any issuance, re-issuance and disposition of shares of stock of any kind, unless the board of directors of the corporation shall specifically grant the right to subscribe or purchase to the then existing stockholders.”

“The DOF’s decision to dispose of the Privatization and Management Office’s SMPC common stocks is a shareholder disposition, and therefore the timeline and mode of disposal are dependent on them as a shareholder,” Levina explained.

Velasquez said that while the decision hinges on the right timing, the privatization of SMPC shares is expected to move forward “within the next year.”

“Most important is the valuation of the shares and looking for investors, especially right now that the market is moving,” Velasquez added.

“It will benefit us if the stock market is doing well.”

SMPC, a subsidiary of DMCI Holdings Inc., is the largest coal producer in the Philippines and the only local power generation firm that owns and mines its own fuel source.

It operates four-unit, 900-MW power plants – the 2x300-MW coal plant under Sem-Calaca Power Corp. and the 2x150-MW power plant under Southwest Luzon Power Generation Corp.