Metro Pacific extends loan to Lopez firm
By Miguel Camus, Business Mirror | 11/24/2009 2:13 AM
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MANILA - Listed Metro Pacific Investments Corp. is proceeding with a part of its agreement with the Lopezes which may result in the Pangilinan firm’s purchase of a key stake in Manila Electric Co. (Meralco) amid complaints by the pension fund Government Service Insurance System (GSIS).
In a filing to the stock exchange on Monday, Metro Pacific, led by businessman Manuel V. Pangilinan, said it extended the agreed upon P11.2-billion loan to the Lopez-led First Philippine Utilities Corp., a subsidiary of energy conglomerate First Philippine Holdings Corp. (FPHC).
FPHC will guarantee the loan with 138.36 million of its shares in First Gen Corp. and 30.09 million shares in Meralco. The deal will be payable on June 30 next year, extended from the original on March 31 deadline.
As part of the deal, Metro Pacific will be granted an option to buy remaining half or the 6.7-percent Meralco stake owned by FPHC. The option will be given on January next year and will expire on March 31 next year.
On November 5, Metro Pacific secured an initial 6.7-percent stake in Meralco when it matched the rival offer of Henry Sy Jr.’s TriRatna Holdings Corp. of P300 per share after exercising its right of first refusal.
However, GSIS—which owns 4 percent of Meralco—said the loan in exchange for a call option should trigger a tender offer or buyout of minority stockholders of the power distributor. GSIS also added that it stands to lose P6 billion without a tender offer.
Under the Securities and Regulation Code, a tender offer should occur after a company acquires 35 percent of a listed corporation within a 12-month period.
For its part, Pangilinan’s group said a tender offer is not required as no transaction or transfer of shares has occurred, and that a call option may not be exercised by the deadline on March 31.
If Metro Pacific exercises the call option, it will pay the full P22.4 billion for the Lopez stake.
Pangilinan’s group already controls 34.7 percent of Meralco through Metro Pacific (14.7 percent) and Philippine Long Distance Telephone Co. unit Pilipino Telephone Corp. (20 percent). The addition of the Lopez stake will increase the group’s holdings in Meralco to 41.4 percent.
The GSIS on Friday had already filed charges against officials of both Metro Pacific and FPHC. It likewise asked the Philippine Stock Exchange (PSE) to suspend the trading of Metro Pacific’s shares and as well as for the firm to be delisted.
Officials of the Securities and Exchange Commission, which enforces the tender offer rules, and the PSE, have separately said they will study if a tender offer is required.
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