LISTED firm JG Summit Holdings Inc. and Metro Pacific Investments Corp. announced Wednesday, Dec. 23, 2020 the signing of agreements with Meralco PowerGen Corp., a wholly owned generation subsidiary of Manila Electric Company, to transfer their respective shareholdings in Global Business Power Corp. to MGen.
JGS holds a 30 percent ownership interest in GBP while MPIC, through a subsidiary, holds a 56 percent interest. MGen currently owns the remaining 14 percent. As a result of the transaction, MGen will own 100 percent of GBP.
The transaction is part of the two conglomerate groups’ direction to consolidate their power sector investments into a single vehicle.
GBP is the leading power producer outside Luzon with a gross capacity of 1,091 megawatts. The company has assets in the Visayas and Mindanao. The transfer is expected to deliver scale and operational synergy to both GBP and MGen.
“We are happy with how GBP has performed since our investment in 2016. The challenge now is how to further grow the business and take it to the next level,” said JGS president and chief executive officer (CEO) Lance Gokongwei.
Complementary
“Each of the two parties has complementary strengths and thus together can create a solid and unique platform for strategic growth. The combined group will be in a strong position to respond to the needs of the country as the economy makes a strong rebound in 2021, with the now brighter prospect of available vaccines against the Covid-19,” said MPIC president and CEO Jose Ma. K. Lim.
“With GBP’s operational experience of successfully running its own portfolio of generation assets, coupled with MGen’s own record of managing the first supercritical generation plant in the country, MGen will be better placed to focus on its plan to build its own generation portfolio, including an ambition to own at least one gigawatt in renewable energy capacity in five years,” said Meralco president lawyer Ray Espinosa.
MGen is a wholly owned subsidiary of Meralco, where MPIC holds an effective 45.46 percent interest, while JGS holds a 29.56 percent interest. The transaction is subject to customary closing conditions, including third party approvals, and is expected to close within the first quarter of 2021, barring any unforeseen circumstances. / PR