Business World
HENRY C. Sy, Jr.-led Synergy Grid & Development Philippines, Inc., formerly UEM Development Philippines, Inc., wants to raise as much as P35 billion through various fund-raising schemes.
Fresh capital will bankroll power, utility and infrastructure projects as well as refinance outstanding debt, executives said yesterday.
“For the total funding activity, whether preferred shares or [other] funding activities, we are looking at probably around P30 billion-P35 billion,” Gary P. Cheng, managing director and partner at Fortman Cline Capital Markets Philippines, Ltd., told reporters after the company’s stockholders’ meeting in Pasay yesterday.
“Based on requirements, optimally I can say [we can raise funds] in the next six months depending on market conditions,” Mr. Cheng added.
Mr. Sy’s group bought into the publicly listed UEM Development in September and then renamed it Synergy Grid under a scheme that will turn the shareholder in National Grid Corp. of the Philippines (NGCP) into a member of the Philippine Stock Exchange.
Trading of shares in UEM Development were halted in November pending approval of the backdoor listing. Shares in the company were last traded on Nov. 22 at an all-time high of P217.40 apiece, following the entry of Mr. Sy, son and namesake of mall and banking taipan Henry Sy of the SM group.
The younger Sy entered National Grid, the utility which operates the country’s power transmission highway, in March by taking over the then Razon-led Monte Oro Grid Resources Corp., which held a 30% stake in National Grid. Yesterday, Synergy Grid stockholders approved a scheme in which Monte Oro’s parent, OneTaipan Holdings, Inc., became part owner of Synergy Grid in exchange for the stake in National Grid.
A similar share swap deal with the Coyiuto group’s Pacifica21 Holdings, Inc., owner of Calaca High Power Corp. which also held 30% of National Grid, was also approved.
The remaining 40% stake in NGCP is owned by the State Grid of China Corp.
Shareholders approved the fund-raising schemes and the inclusion of power projects and authority to engage in power, utilities, infrastructure and related businesses in Synergy Grid’s primary purpose.
“We approved the sale of 65 million preferred shares ... that is just preliminary and the board was given the authority to determine the exact amount depending on the requirements of the company,” Vicente D. Gerochi IV, director at Synergy Grid, told reporters.
Shareholders also allowed the company to enter general construction projects as its secondary purpose. “We are also looking at infrastructure,” Mr. Sy said, referring to the government’s P740-billion public-private partnership program.
Mr. Sy said NGCP has around P3 billion in liabilities due to debts incurred for past power transmission projects.
New capital might be used “partially for refinancing some of the debts,” Mr. Cheng said.
The company, which will amortize the liabilities over 25 years, may use refinancing schemes given better interest rates, Mr. Sy said.
UEM Development was incorporated in June 1970 as mining firm Mankayan Minerals Development Co., Inc. before becoming an investment holding firm specializing in infrastructure in 1997. In previous disclosures, UEM Development said there were no significant business activities as of end-2009.
The firm cut its net loss to P464,126 in the first half from P600,218 the previous year. Revenues were derived from a consultancy agreement with UEM-Mara Philippines Corp., a firm connected to the Coastal Road project, that began in 2003.
Mr. Sy said the company has dropped the consulting business given its new objectives.
Last year, the younger Sy’s Triratna Holdings Corp. made a surprise offer to buy a stake in power distributor Manila Electric Co. (Meralco) at a premium of nearly 60%. But his offer was matched by the group of businessman Manuel V. Pangilinan, a key Meralco shareholder that had priority rights over the shares. -- Neil Jerome C. Morales
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