PLDT Won But Meralco Still In Control
Posted on July 28th, 2009
A feat to celebrate a birthday. The event was such as the sale of Meralco’s shares to Pilipino Telephone Corp closed on July 14., the 63rd birthday of Manuel V. Pangilinan or MVP, head honcho of the Philippine Long Distance Telephone Company.
The formal closing of the sale provided PLDT with management control over Manila Electric Co. Present during the signing ceremony were PLDT President and Chief Executive Napoleon Nazareno; First Holdings Chairman Oscar Lopez and First Holdings President Elpido Ibañez.
First Philippine Holdings received P20.07 billion from Piltel in exchange of 20 percent interest in Meralco. Piltel, the energy holding company of the PLDT group acquired 223 million Meralco common shares which were previously controlled by the Lopez,s group’s First Philippine Utilities Corp.
MVP now has significant control over two of the Philippines most strategic utilities. However, his control over Meralco is precarious as the combined stake of PLDT and its Lopez friends is at around 44.1 percent while San Miguel Group and its allies hold 43 percent.
The San Miguel Group which had pre-emptive rights over the shares brought by Piltel, did not invoke its right of first refusal over the 20 percent stake.
When San Miguel first bought into Meralco by purchasing the shares of the Government Service Insurance System, the company worked out an arrangement with the Lopez group to have the first grab at additional shares up for sale.
Lawyers for Meralco and San Miguel were aware of the agreement and were surprised that San Miguel President and Chief Executive Ramon Ang did not use its pre-emptive rights.
Reports are circulating that San Miguel has allegedly reached an agreement with the PLDT group for doing so. The agreement reportedly includes the sale of Manila North Tollways Corp., operator of North Luzon Expressway to San Miguel.
Metro Pacific Investments Corp., an arm of the PLDT Group recently acquired MNTC from the Lopez group.
