JG Summit acquires 30% of Global Business Power

MANILA, Philippines - Gokongwei-owned JG Summit Holdings has acquired a 30 percent stake in Global Business Power Corp. (GBPC) from major investors led by GT Capital Holdings Inc.

JG Summit acquired 22 percent from GT Capital and eight percent from Meralco Power Gen.

Ty-led GT Capital decided to dispose of its 22 percent stake in the power plant shortly after it acquired the stake of Orix P&E Philippines Corp. in GBPC.

GT Capital said the move is in line with the group’s decision to continue its indirect participation in the power industry, in a disclosure to the Philippine Stock Exchange yesterday.

In a separate disclosure, JG Summit said it has agreed to purchase 577 million shares of GBPC consisting of 423 million shares from GT Capital and 153 million shares from Meralco PowerGen Corp.

JG Summit said the move expands its participation in the power sector.

GBPC is one of the leading independent power producers in the Visayas region and Mindoro island with a combined gross maximum capacity of 704 megawatts comprising 696.5 MW of power supplied to the Visayas grid and 7.5 MW of power supplied within Mindoro island.

Last May, Metro Pacific Investments Corp. (MPIC) acquired a 56 percent stake in GBPC for P22.06 billion following a strategic alliance with GT Capital.

GT Capital then entered as a strategic investor in MPIC, acquiring 15.6 percent of the conglomerate for P21.96 billion.

This makes GT Capital the second largest investor in the infrastructure conglomerate as it sets its sights on the growing infrastructure business in the country. Hong Kong-based First Pacific retains a 55 percent stake.

Commenting on the transaction, COL Financial analyst George Ching said the earnings outlook of GBPC is also very positive as it is planning to boost its capacity by 128 percent or 850 MW in the next five years.

“Based on our estimates, the GBPC deal should have a positive impact on JGS’s FV estimate and earnings. The 22 percent stake in GBCP was acquired for P22.06 billion, below our NAV estimate for the company. Our 2016 earnings forecast for JGS increased marginally by 0.3 percent to P31.9 billion,” he said.