MANILA ELECTRIC CO. (Meralco) is weighing its next steps after San Miguel Global Power Holdings Corp. (SMGP) acquired shares in the company as a result of a long-delayed deal.
“That was discussed earlier at the board. No decision yet. We’re just looking at the options. It really depends on what San Miguel’s responses are,” Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan told reporters on Monday.
A question was raised as to whether Meralco is open to acquiring the 43.23 million shares — equivalent to a 3.9% stake — that SMGP bought from state-run Land Bank of the Philippines (LANDBANK) at P90 per share.
In 2008, SMGP — then known as Global 500 Investment — entered into a share purchase agreement with LANDBANK involving Meralco shares. The state-run lender later rescinded the deal, prompting SMGP to sue for damages, arguing that the cancellation was unjustified. In November 2022, the Court of Appeals sided with SMGP, ruling that the bank’s decision to withdraw from the agreement had no factual basis.
While no decision has been made yet, Mr. Pangilinan said that SMGP is “welcome to become shareholder.”
As the country’s largest private distribution utility, Meralco serves over eight million customers across Metro Manila and nearby areas.
In line with its efforts to expand and improve electricity service in underserved regions, Meralco last year submitted an unsolicited proposal for a joint venture with Batangas Electric Cooperative II (Batelec II), following calls for more stable and reliable power in Batangas province.
Ariel Paciano D. Casanova, Meralco’s senior vice-president for external and government affairs, said the company is now seeking clarification from Batelec II on the process for competitive selection.
“We ask them how are they going to treat our unsolicited proposal? How will the selection be done? Will our unsolicited proposal be respected and then will they have it challenged? Or will they come up with an open bidding for selection? So those are the queries,” he said.
He said that the proposed joint venture would involve converting the electric cooperative into a stock corporation, to be supported through capital infusion by acquiring shares in the new entity.
Under the Electric Power Industry Reform Act, electric cooperatives are allowed to convert into either a stock cooperative or a stock corporation.
“We want to have a better, wider participation in the electric cooperative,” Mr. Casanova said. “So basically we’re empowering the electric cooperative by infusing capital and technology into our technical capability.”
Meralco’s majority shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera