PLDT Inc. said Tuesday it is in talks with a foreign investor to sell its remaining stake in power retailer Manila Electric Co. for over P26 billion.
“We are now in discussion with a number of interested investors in respect of this interest of PLDT in Beacon and the timetable for the disposal would not be this year…but would most likely first-half of 2017,” PLDT chairman and chief executive Manuel Pangilinan said.
PLDT has an 8.7-percent interest in Meralco through Beacon Electric Assets Holdings. Pangilinan, who also serves as Meralco chairman, said the value of the remaining stake would be likely “north of P26.2 billion.”
PLDT Communications and Energy Ventures Inc. and Metro Pacific Investments Corp. signed a sale purchase agreement in May for the latter to acquire a further 25-percent stake in Beacon.
Beacon owns 35 percent of Meralco and 56 percent of Global Business Power Corp., a unit of GT Capital Holdings Inc. of tycoon Geroge Ty. The purchase will be settled in a cash payment of P17 billion, with the balance of P9 billion to be paid over the next four years.
Upon completion of the transaction, MPIC will continue to own a direct 15-percent interest in Meralco and through its 75-percent interest in Beacon, a further 26 percent, thereby taking its effective ownership interest in Meralco to 41.2 percent and in Global Power to 42 percent directly and about 9.1 percent indirectly through Meralco.
PCEV’s interest in Meralco will be reduced to an effective interest of 8.7 percent. There will be no change in the aggregate interest of MPIC, PCEV and Beacon in Meralco, which remains at 49.96 percent.
Meanwhile, PLDT said net income fell 33 percent in the second quarter to P6.25 billion from P9.34 billion in the same period last year.
PLDT, partly owned by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT group, said net income in the first half also declined 33 percent to P12.46 billon from P18.73 billion a year ago.
The company linked the drop in net income during the period to its investment in Rocket Internet. “There was a P5.4-billion impairment booked in the first-half with respect to Rocket to reflect share price of Rocket at 17.40 euro per share which was its June 30 share price,” PLDT chief finance officer Anabelle Chua said.
She said in the second quarter alone, PLDT recorded a P3.8-billion loss from its investment in Rocket Internet.
Pangilinan, however, said PLDT was keeping its investment in Rocket. “It’s a long-term goal. There is not much we can do in short term. I think we just have to give some slack to Oliver [Samwer] and see what he can do in the short immediate term in Rocket Internet. In fairness to him, he knows he is under pressure from us and other shareholders to perform with respect to investment in Rocket Internet. I think we just need to give him a bit of time,” Pangilinan said.
Samwer is the founder and chief executive of Rocket Internet.
Core profit, which excludes foreign exchange gains or losses and other non-recurring income, dropped 6 percent to P17.7 billion in the first half from P18.93 billion last year.
Consolidated revenues barely grew to P85.28 billion from P85.19 billion. Pangilinan said PLDT was keeping its core net income guidance of P30 billion this year.
“Underpinning our digital pivot is a comprehensive program to improve our digital infrastructure. We are transforming not only our fixed and mobile networks, but also building a formidable system of data centers. This places PLDT in a unique position to lead in the development of the country’s digital economy,” he said.
