MPIC acquires 56% of global power for P22 B Metro Pacific, GT Capital forge strategic alliance

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) will acquire a 56 percent stake in tycoon George Ty’s power generation arm Global Business Power Corp. for P22.06 billion as part of the strategic alliance formed by the Pangilinan-led group and the Ty family.

Under the deal, GT Capital will enter as a strategic investor in MPIC, with the acquisition of a 15.6 percent stake.

This will make GT Capital the second largest investor in MPIC, an infrastructure conglomerate controlled by Hong Kong-based holding firm First Pacific Co. Ltd.

MPIC president and CEO Jose Ma. Lim said GT Capital would purchase 4.98 billion common shares of MPIC at P6.10 per share for a total of P21.96 billion.

GT Capital will acquire another 1.3 billion common shares from Metro Pacific Holdings Inc. (MPHI), the majority shareholder of MPIC, at the same price for P7.93 billion.

First Pacific remains the controlling shareholder of MPIC with a 55 percent voting interest.

MPIC chairman Manuel V. Pangilinan said the transaction was a rare opportunity for the company.

“The investment in Global Power is part of our drive to accelerate the pace of overall participation in the power generation sector while allowing Meralco to focus predominantly on the development of its ‘One Meralco’ strategy focused on servicing its Luzon customers,” Pangilinan said.

Pangilinan said “this investment has strengthened MPIC’s finances and together we will work to accelerate our investment in, and development of, the infrastructure of our country.”

 In an interview, GT Capital vice chairman Alfred Ty, son of George Ty, said the strategic alliance provides the conglomerate an opportunity to look at other aspects of the economy.

“With this investment, GT Capital now becomes the strategic investor of MPIC, a dynamic growth company embedded in the most critical sectors of power, water, toll roads, railways and healthcare.

This is a significant milestone for GT Capital since it expands and strengthens our core sector coverage with an infrastructure platform ensuring sustainable growth,” Ty said.

MPIC’s acquisition of Global Business Power will be done via affiliate Beacon Electric Asset Holdings Inc.

The purchase will be settled with P11 billion in cash on closing and the balance via a vendor financing facility to be replaced within 90 days of closing by long-term bank debt.

Funding will come from a combination of internal resources and bank debt,” MPIC said.

Global Power is the leading power supplier in Visayas with an aggregate 852 megawatts of coal and diesel powered generating capacity (including 150 MW to commence operations later this year).

Its main project is a 670 MW super critical coal fired plant in La Union, Pangasinan.

MPIC said the investment in Global Power would be immediately accretive to the earnings of Beacon Electric.