After Meralco, Gokongwei eyes more power assets
MANILA, Philippines - The Gokongwei group is eyeing more power assets, after its successful entry into Meralco.
JG Summit Holdings bought out the San Miguel group from Meralco, leaving the Gokongwei and Pangilinan groups now the major shareholders of the utility.
JG Summit president and CEO Lance Gokongwei said he is bullish about the prospects in the power industry.
"We were attracted by the company. I think primarily it's a very steady return profile, particularly from the distribution business. It's their dividend yield. We were attracted by the growth prospects it showed in generation business. All in all, we're great believers in the growth of the Philippine economy. And we think that the power business will grow in line with Philippine economy," he told ANC.
Gokongwei said they may also need more power investments to complement their biomass and petrochemical businesses.
"Clearly this is a big investment in our case, we continue to look into other power investments independent of JG Summit's investments in Meralco. In Universal Robina, we are putting up our biomass plant attached to our sugar operations. It should be operational sometime in the latter part of next year. And we are also looking at other projects related to supporting our petrochemical business," he said.
On Tuesday, JG Summit said it will buy San Miguel's stake in Meralco for P72 billion, a discount of around 19 percent to market prices.
"JG Summit intends to finance the acquisition with a combination of debt and equity capital," JG Summit said in a filing to the Philippine Stock Exchange. - With ANC and Reuters