SMC, Avenue Asia of US to bid for PNOC-EDC

Food and beverage giant San Miguel Corp. is teaming up with New York-based investment firm Avenue Asia to bid for the government’s remaining 60-percent stake in geothermal firm PNOC-Energy Development Corp. (PNOC-EDC), according to a high-ranking official.

“We will partner with Avenue Asia,” said San Miguel president Ramon Ang.

Avenue Asia focuses primarily on distressed and undervalued credit-related securities (both public and private), bank loans, trade claims and private investments (debt and equities). It manages assets valued at around $4.3 billion as of Sept. 30, 2007, according to the company’s website.

The government’s shareholdings in PNOC-EDC is valued at a minimum of P36 billion.

Aside from Avenue Asia, San Miguel has partnered with Beleggingsmaatchappij Broem B.V. of the Netherlands.

The San Miguel-led consortium, Panasia Energy Holdings Inc., is one of the five groups that have submitted final qualification documents. The other groups include ACR-AEI Holdings Inc. (Alsons Consolidated Resources and AEI Investments Inc.), FDC Geo-Energy Holdings Inc. (Filinvest Development Corp. and International Power Masinloc Holdings Inc.), AP Renewables (Aboitiz Power Corp.), and Red Vulcan Holdings Corp. (First Gen Corp., Spalmare Holdings B.V. and Prime Terracota Holdings Corp.)

Should the food and drinks conglomerate fail to acquire the government’s shareholdings in PNOC-EDC, it would bid for a 25-year license to operate the national grid, earlier valued at $3 billion.

San Miguel unit San Miguel Energy Corp. has teamed up with the subsidiaries of Tenaga Nasional Berhad and Texas Pacific Group to bid for the multi-billion dollar power grid, which would require $850 million in capital over the next five years for upgrades and expansion.

San Miguel’s foray into the energy sector is part of a bold move to venture into non-core businesses such as mining, banking, and infrastructure.

San Miguel is awash with cash following the sale of its Australian investments in dairy and beer for $2.9 billion.

Southeast Asia’s largest conglomerate also expects to raise around P25 billion from the planned initial public offering of its domestic beer unit next year. It also plans to take its regional packaging business public.