GT Capital shifts to infra after unloading power investments

MANILA, Philippines - GT Capital Holdings Inc., the George Ty-owned conglomerate, has now fully exited the lucrative power sector as it makes a bigger bet for its long-term growth on the infrastructure business through its recent acquisition of a stake in Pangilinan-led Metro Pacific Investments Corp. (MPIC).

There could be more acquisitions in the future if there is an opportunity, but the company is unlikely to dispose of any other businesses after giving up its stake in Global Business Power Corp. (GBPC), a power giant in the Visayas, a ranking official said.

“We gave up our stake in the power generation sector because we’ve always wanted to be involved in infrastructure. Although infrastructure is long-term, we are very bullish on the industry especially with the new administration’s plan to boost infrastructure spending,” GT Capital chief financial officer Francisco Suarez, Jr. told The Star.

Last week, GT Capital unloaded its 22 percent stake in GBPC in favor of JG Summit Holdings, the conglomerate of the Gokongwei family. This followed the acquisition by GT Capital of the 22 percent stake of Orix P&E Philippines Corp. in GBPC.

JG Summit acquired another eight percent stake in GBPC from Meralco Power Gen (MGen), the power generation company of the group of businessman Manuel V. Pangilinan, bringing its total acquisition to 30 percent and further strengthening its partnership with the MVP Group beyond Manila Electric Co. and PLDT Inc.

In all, JG Summit is spending P11.8 billion for the acquisition which consisted of 577.21 million common shares at P20.47 per share.

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, 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 will retain a 55 percent stake.

Suarez said GBCP is doing well, but for GT Capital it was a matter of choosing which investment it really wanted in the long term.

“GBCP is doing very well, but when we were making the evaluation we knew we really wanted to get into infrastructure,” Suarez said, adding they were on the view that the acquisition of a stake in MPIC was an accretive acquisition.

To refinance the company’s recent acquisition, the company intends to raise P12 billion from an issuance of up to eight million preferred shares with an oversubscription option of up to four million shares at an offer price of P1,000 per share.

Suarez said this would be done in the latter part of the year.

GT Capital is a listed major Philippine conglomerate with interests in market-leading businesses across banking, automotive assembly, importation, and dealership, infrastructure, water, power, toll roads, healthcare, and rail, property development, and life and non-life insurance.