PLDT exits power business in $440m deal with Metro Pacific
Leading Philippine telco also ready to cut jobs and expenses
MIKHAIL FLORES, Nikkei staff writer
MANILA -- PLDT, the Philippines' largest telecom, is no longer in the power industry, with one of its units having agreed to sell its stake in an electric utility to Metro Pacific Investments for 21.8 billion pesos ($440 million).
The PLDT unit agreed to sell its 25% equity interest in Beacon Electric Asset Holdings, a special purpose company that holds a 35% stake in Manila Electric Co. (Meralco) and 56% of Global Business Power.
Meralco is the Philippines' largest power distributor, covering Metro Manila and nearby provinces. Global Business Power is the leading power supplier in the Visayas, the country's third largest group of islands.
"The divestment ... will help the PLDT group focus on the key priorities in its core businesses," said Manuel Pangilinan, chairman and CEO of PLDT.
PLDT will use the proceeds to expand and upgrade its communications network.
Metro Pacific will pay 12 billion pesos in cash when the deal closes later this month. The balance will be paid over the next four years. To fund the acquisition, Metro Pacific sold Meralco shares at a 6.5% discount through an overnight private placement.
Meralco shares dropped 3.6% on Wednesday. PLDT's share price climbed 3%, while Metro Pacific's ended flat.
PLDT and Metro Pacific are Philippine units of the Salim-controlled First Pacific, a Hong Kong-listed holding company.
PLDT has been selling assets and preparing to implement layoffs and other cost-cutting measures. Last year, PLDT's net profit was the lowest in a decade, 20.01 billion pesos. For the first three months of 2017, its net income dropped 20% to 4.97 billion pesos.