Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) is selling Meralco Shares
Posted on November 27th, 2008
Following the lead of the government pension fund, government-controlled banks are now also keen in selling their stakes at the Manila Electric Co. (Meralco).
After a successful negotiation between San Miguel Corp. and the Government Service Insurance Service (GSIS) last month, Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) has also signified their intension of selling their Meralco shares. Leading them on the sale plan was the Social Security System (SSS). Does this really mean that the government is taking their hands off the Lopez –led utility company?
DBP is said to have less than 1% stake in Meralco. Landbank on the other hand, is claiming to have a 4% stake or 46 million shares. But according to Meralco, the bank only has 42 million shares or 3.76% interest.
Earlier, SSS President and Chief Executive Officer Romulo L. Neri told of a plan to sell the government stake as a block. “We (SSS) agreed last year that we’d sell as a block – SSS, GSIS and Landbank,†Neri added. Although GSIS decided to sell its stake on its own.
The deal between SMC and GSIS last month in which the latter sold their 27% stake in Meralco, earned the government institution some P30 billion. The price per share was set at P90, at the time of the announcement Meralco shares closed at P44.50 on regular trading.
Landbank president and CEO Gilda E. Pico said that the bank’s board has approved the move to sell their stakes last month. Landbank treasurer Reevie Vergara, together with Pico, said they are looking at a price similar to the one received by the GSIS. They did not disclose the identity of their buyer though.
“We’re looking to selling at the best possible terms at the very least under the same price and terms of the GSIS sale. However, the details of when and who the parties will be still have to be finalized. SSS, ourselves and DBP will be selling to the same party,” Vergara said
Although, news on the grapevine said that SMC led by Cojuango would be the buyer, barring some regulatory kinks that needs to be ironed out.
At any rate, this could be seen as the government taking its hands off the biggest utility company in the country. This can only bring more fear to the consumers that Meralco can do its own bidding and act on whim when it comes to pricing and customer service.
Or was that really the intention?
