Meralco

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Manila Electric Company or Meralco is the largest electricity distribution company in Manila and one of the largest private sector companies in the Philippines. Meralco has a monopoly franchise with a concession area of 9,328 square km (3% of the country's territory). The concession area comprises the whole of Metro Manila and some parts of Luzon, covering 25 cities and 86 municipalities, an area that produces about 50% of Philippine GDP. Meralco had an exclusive franchise for the area. In 1996, Meralco served 2.9 million customers to whom it delivered 20.3 billion kWh or 55.4% of the total energy generated in the Philippines. In 2005 Meralco served 4.3 million customers, and delivered 24.8 billion kWh. Meralco's main electricity provider is National Power Corporation, a state owned company and the main Philippine generator. Meralco started to sign power purchase agreements with independent power producers (IPPs) in the 1990s. These IPPs were the result of the Philippine Fast Track Power Program and Power Development Program. By December 1997, Meralco had signed power supply agreements with three IPPs with capacity totaling 1,000 MW: First Gas Power, Duracom and Quezon Power. Meralco was a private company until the Marcos Administration assumed control from the Lopez family. Marcos nationalised Meralco in 1972 when 99.8% of all shares were put into a government foundation. In 1990, the sequestered shares were freed and put on the market. The Philippine government sold through an initial public offering a 20.5% equity stake in Meralco for $54.59 million (P1.5 billion) in 1991. In a second transaction, the government sold 31.5 million A shares representing about a 3.8% equity stake for $76.8 million (P2.6 billion) in 1997. These A shares, for domestic investors only, were bought by a joint venture of First Philippine Holding Corporation and Spanish Union Fenosa. In a third transaction in April 1999, the government sold 11% equity stake of Meralco for US$94 million to First Philippines Holdings (US$31 million) and Union Fenosa (US$63 million). In October 2008, Government Service Insurance Systems (GSIS), a government agency, sold its 27% holding in Meralco to San Miguel Corp. for a total consideration of US$696 million (P30.97 billion). In December 2008, three other state-owned institutions - Landbank, Social Security Systems and Development Bank of the Philippines - sold their combined 10% stake in Meralco to Global 5000 Investment Corp., a private company, for US$223 million (P9.9 billion). These transactions brought the government's equity paricipation in Meraclo to less than 1% as of Dec. 31, 2008. Meralco's 1989 US$130 million expansion and rehabilitation program included the following: a) construction and upgrading of subtransmission lines, and addition to substation capacity; b) upgrading the existing distribution network; c) improvement and expansion of the radio-multiplex facilities for monitoring and control; and d) provision of equipment and vehicles to improve maintenance. Such expansion received a $65.6 million loan from the World Bank that was repayable over 20 years, including five years grace at the standard variable interest rate. Meralco has continued to invest in its system; from 2001-2005, it intended to invest P515.13 billion (US$1,118 million) in upgrades and expansion. http://www.meralco.com.ph/ Information taken from Company's annual report in million of pesos. Converted to US$ using annual average market exchange rate. Captial expenditure Meralco millions of pesos 2008 7260 44.475 163 2007 6469 46.15 140 2006 5547 51.31 108 2005 5278 55.08549167 96 2004 5421 56.03991667 97 2003 6435 54.20333333 119 2002 6505 51.60356667 126 2001 7232 50.99265 142 2000 5385.7 44.19225 122