Thursday, August 23, 2007 Gov't pursues disposal of shares in power firm
FINANCE Secretary Margarita Teves is confident that they could sell the remaining stakes of the government with the Manila Electric Company (Meralco) before the yearend.
"It's still ongoing but timing wise, we're still looking at studies and it could be done in either on the third or fourth quarter," Teves told reporters.
Teves said the government prefers to sell its 29 percent-stake through a block sale to get a premium.
He said several investors have expressed interest in buying the government's share. However, he cannot disclose who they are.
Teves said they may look for a financial adviser for the sale of government's 29 percent collective stake in Meralco, which mostly include the shares owned by government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs).
The government is hoping to raise P5 billion from the sale of its stakes in Meralco, which will be used to balance the budget.
The Lopez Group has been very vocal in its intention to purchase the government's 29 percent-stake.
The Lopez Group and First Philippine Holdings Corporation (FPHC) own 17 percent of Meralco while Union Fenosa, Spain's gas and electricity company holds roughly about nine percent.
Union Fenosa's stake in Meralco was recently sold to FPHC, bringing the Lopez Group's stake to 26 percent. The remaining shares are being held by public and other investors.
Earlier, FPHC agreed to purchase another 6.6 percent stake in Meralco from Meralco Pension Fund for P8.3 billion and to boosts further its bid for the government's stake in Meralco, FPHC recently obtained a US$100 million loan from Banco de Oro-EPCI Inc.
The company aims to raise as much as US$350 million to fund its bid to increase its stake in the power distributor.
Meralco, which boasts of over four million customers in its franchise area, reported a net income of P2.341 billion for the first six months of the year, an increase of over 500 percent from a net income of P367 million for the same period in 2006.
Likewise, Meralco reported a 62 percent increase in its net income for the first quarter alone - from P1.12 billion to P1.81 billion - in the same period last year as the company stopped provisioning for probable losses due to a ruling from the Supreme Court (SC) on its unbundling case.
The company's total revenues rose by 20 percent - from P89.51 billion to P107.39 billion in the first half. For the second quarter, revenues reached P59.19 billion, up 23.6 percent from P47.892 billion in 2006.
Electricity sales increased by 4.2 percent as of end June - to 12,839 gigawatthours with the commercial segment posting higher sales by 5.5 percent, followed by industrial - 3.6 percent, and residential at three percent. (MSN/Sunnex)
