Metrobank statement on FMIC’s sale of 20% stake in Global Business Power

PRESS RELEASE

First Metro signs agreement with Meralco PowerGen on sale and purchase of Global Business Power shares

Metropolitan Bank & Trust Company (Metrobank) announced today that its investment banking subsidiary, First Metro Investment Corporation (First Metro), signed a Share Sale and Purchase Agreement (SSPA), subject to closing conditions, for the sale of 20% of Global Business Power Corporation (Global Power) with Meralco PowerGen Corporation (MGen), a wholly-owned subsidiary of Manila Electric Company (Meralco). This sale comes after the recently concluded purchase by ORIX Corporation of Japan (ORIX) of 20% of Global Power last June 27, 2013.

“We welcome the entry of Meralco PowerGen into Global Business Power Corporation. As a strategic partner, Meralco extends the reach of Global Power and deepens its commitment in the power sector enabling it to address the growing power generation requirements within, and outside the communities it presently serves”, Global Power Chairman Francisco C. Sebastian explained. Early this year MGen and Global Power signed an agreement to pursue selected power generation projects in Mindanao.

“The signing of the SSPA represents a strategic investment for MGen. It is also a strategic alliance that will combine the expertise of both MGen and Global Power that is expected to strengthen further the industry position of both companies while ensuring a stable supply of reliable and cost-competitive power for the country”, MGen president Oscar S. Reyes said.

Upon conclusion of the transaction, the resulting ownership structure of Global Power will be as follows, First Metro with 9.11%, ORIX with 20%, MGen with 20% and GT Capital Holdings, Inc. (GT Capital) retaining its majority ownership at 50.89%. GT Capital is the listed investment holding company of the Ty family, the component businesses of which include Global Power, Metrobank, Toyota Motor Philippines, Federal Land, Inc., Philippine AXA Life Insurance Corporation and Charter Ping An Insurance Corporation.

The sale and purchase agreement for the Global Power shares is in line with Metrobank’s capital raising initiatives in preparation for the upcoming implementation of Basel III in the Philippines by January 1, 2014.

Global Power is one of the largest independent power producers in the Visayas. It currently owns and operates nine power plants, with a total installed capacity of 627 megawatts (MW). From a 230-MW mainly bunker fuel capacity in 2006, the company has completed a 410-MW expansion program for its plants, utilizing clean coal-fired technology. The expanded plants commenced commercial operations in 2011. Two expansion projects are on stream: an 82 megawatt plant in Toledo City which will be under construction late 2014 and a 150 megawatt expansion in Panay for completion by the second half of 2016.

Global Power’s major plants are located in Toledo City in Cebu and in Iloilo City in Panay Island, supplying power to private utility companies such as Visayan Electric Company (VECO) and Panay Electric Company (PECO), export and industrial zones in Mactan and Balamban, mining and industrial companies like Carmen Copper Corporation (CCC) and Philippine Phosphate Fertilizer Corporation (Philphos) as well as electric cooperatives in most Visayan islands.

MGen is a wholly-owned subsidiary of Meralco, the largest power distribution company in the Philippines. In 2010, Meralco made a strategic decision to re-enter the power generation business through MGen to develop highly cost-competitive and reliable power plants and ensure the provision of adequate, reliable, and reasonably-priced power to residential, commercial, and industrial customers in the Meralco franchise area and in other areas which may benefit from its supply of power.

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