{"id":7900,"date":"2025-01-29T10:09:39","date_gmt":"2025-01-29T09:09:39","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=7900"},"modified":"2025-01-29T10:09:39","modified_gmt":"2025-01-29T09:09:39","slug":"maharlika-eyeing-chinese-investment-in-ngcp","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/01\/29\/maharlika-eyeing-chinese-investment-in-ngcp\/","title":{"rendered":"Maharlika Eyeing Chinese Investment in NGCP"},"content":{"rendered":"\n

By Aubrey Rose A. Inosante <\/b>and <\/i><\/span>Sheldeen Joy Talavera, <\/b>Journalists <\/i><\/p>\n

MAHARLIKA Investment Corp. (MIC) is keen on purchasing State Grid Corp. of China\u2019s (SGCC) interest in the exclusive operator of the Philippines\u2019 electricity grid.<\/span><\/p>\n

MIC President and Chief Executive Of<\/span>f<\/span>icer Rafael D. Consing, Jr. stated during a Palace briefing that the sovereign wealth fund would consider SGCC\u2019s holdings in the National Grid Corp. of the Philippines (NGCP) \u201cif it becomes accessible.\u201d<\/span><\/p>\n

China\u2019s State Grid holds a 40% interest in NGCP, while the remaining shares are largely managed by Synergy Grid & Development Phils., Inc. (SGP).<\/span><\/p>\n

\u201cWe have not fundamentally communicated with the Chinese. We only recognized this opportunity at the SGP level. Currently, we\u2019re not in any conversations with State Grid of China,\u201d Mr. Consing remarked.<\/span><\/p>\n

On Monday, MIC finalized an agreement to acquire a 20% interest in SGP for P19.7 billion or approximately P15 per preferred share, establishing a \u201cfoothold\u201d in NGCP.<\/span><\/p>\n

Mr. Consing indicated that MIC could convert the preferred stocks into common shares in the future at a conversion price of P22.50 each.<\/span><\/p>\n

\u201cThe preferred shares will ensure us a 6.5% dividend yield during the initial three years\u2026 Within that timeframe, we have the option to convert to common shares\u2026 Should we choose not to, the dividend rate will increase to 8%,\u201d he noted, estimating that this could yield about P1.7 billion to P1.8 billion annually for MIC.<\/span><\/p>\n

MIC aims to complete the agreement within 90 days, with a possibility of extending for another 90 days, he added.<\/span><\/p>\n

In the meantime, Mr. Consing mentioned that MIC anticipates revealing four additional investments this year.<\/span><\/p>\n

\u201cThis (NGCP agreement) is set to be our initial announcement, and I would intuitively suggest that within the next 30 days, we could disclose another,\u201d he stated. \u201cFor the year, we aim for three to four significant ones. By year-end, we should have numerous foreign investors.\u201d<\/span><\/p>\n

\u2018LEVEL OF INFLUENCE\u2019
\n<\/b>Mr. Consing, however, clarified <\/span>that the aim of the NGCP investment was not to gain control but \u201crather to achieve some degree of influence through the secured board seats.\u201d<\/span><\/p>\n

The agreement provided MIC with two board positions on both SGP and NGCP boards.<\/p>\n

Mr. Consing stated that MIC would not engage in the daily operations of the grid operator, being a financial backer.<\/p>\n

However, he noted that MIC would have access to NGCP\u2019s financial reports and oversight of how the grid operator operates.<\/p>\n

NGCP is a private entity responsible for operating, maintaining, and developing the country\u2019s electricity grid. It commenced its operations as a power transmission service provider in 2009.<\/span><\/p>\n

Energy Secretary Raphael P.M. Lotilla expressed during the same briefing that MIC\u2019s investment would assist in lowering electricity expenses nationwide by bolstering power supply security.<\/span><\/p>\n

He emphasized that the government\u2019s board positions in NGCP would also promote enhanced transparency.<\/span><\/p>\n

\u201cAs NGCP asserts, there is no cause for concern regarding its presence; hence, we\u2019ll be in a better position to verify or affirm that,\u201d he remarked.<\/span><\/p>\n

\u201cConversely, if there are other aspects that need fortification\u2014such as the cybersecurity of national transmission lines and facilities\u2014then the government would also be better positioned to contribute to address those matters,\u201d he added.<\/span><\/p>\n

Legislators have raised alarms over SGCC’s involvement, a state-owned company of the Chinese Communist Party, in the grid operator, citing national security issues.<\/p>\n

NGCP previously reiterated that it is Filipino-controlled, easing worries about its Chinese stakeholder\u2019s influence in operations.<\/p>\n

\u201cI was hoping that the 40% share held by State Grid Corporation of China would be reacquired by the government for national security objectives,\u201d Senator Joseph Victor G. Ejercito communicated to reporters via a Viber message on Tuesday.<\/span><\/p>\n

He also voiced his support for MIC in pursuing SGCC\u2019s shares in NGCP, emphasizing that \u201cespecially with the ongoing conflict with China in the West Philippine Sea, it should be a priority.\u201d<\/span><\/p>\n

Meanwhile, Alfred Benjamin R. Garcia, head of research at AP Securities, Inc., remarked that MIC\u2019s participation in SGP is likely \u201cto provide the government with insight into the operations and corporate decisions of NGCP to tackle national security concerns.\u201d<\/span><\/p>\n

\u201cFinancially, NGCP (or SGP) does not significantly require capital injection as they are quite affluent. The potential benefit for the company could be fewer regulatory hurdles with the government as a stakeholder,\u201d Mr. Garcia noted in a Viber message.<\/span><\/p>\n

He added that MIC\u2019s engagement could facilitate the approval of specific permits and resolve right-of-way challenges that have impeded NGCP project executions.<\/span><\/p>\n

Shares of SGP increased by 4.74% or 52 centavos to close at P11.50 on Tuesday. During the opening of trading, SGP requested a one-hour trading pause due to signing a binding term sheet with MIC for the subscription of preferred shares.<\/span><\/p>\n

Simultaneously, Noel M. Baga, co-founder of the think tank Center for Energy Research and Policy (CERP), indicated that MIC\u2019s investment in NGCP represents \u201ca step toward bolstering energy security for Filipinos.\u201d<\/span><\/p>\n

He stated that MIC\u2019s representation on NGCP\u2019s board of directors \u201ccan expedite critical transmission initiatives and enhance grid management\u2014factors that directly influence power reliability and cost.\u201d<\/span><\/p>\n

\u201cWhile this progress may improve oversight of transmission infrastructure, CERP believes that comprehensive reforms, particularly amendments to the National Grid Code and Philippine Distribution Code, are vital for ensuring secure and reliable power supply for all Filipinos,\u201d Mr. Baga expressed in a Viber message.<\/span><\/p>\n

Although the government\u2019s increased stake in the energy sector, including transmission, may be considered \u201cfavorable,\u201d the Maharlika investment fund that supports the deal has \u201cyet to address crucial issues of transparency, accountability, and potential conflicts of interest,\u201d noted Jose Enrique \u201cSonny\u201d A. Africa, executive director at think tank IBON Foundation.<\/span><\/p>\n

\u201cIf left unaddressed, the agreement could merely reinforce corporate and regulatory capture of the privately dominated power sector under the pretense of enhanced government oversight,\u201d he mentioned in a Viber message. \u2014 with<\/i> <\/i>Kyle Aristophere T. Atienza<\/b><\/span><\/p>\n


\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Aubrey Rose A. Inosante and Sheldeen Joy Talavera, Journalists MAHARLIKA Investment Corp. (MIC) is keen on purchasing State Grid Corp. of China\u2019s (SGCC) interest in the exclusive operator of the Philippines\u2019 electricity grid. MIC President and Chief Executive Officer Rafael D. Consing, Jr. stated during a Palace briefing that the sovereign wealth fund would<\/p>\n","protected":false},"author":3,"featured_media":7901,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[1056],"class_list":["post-7900","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy-and-markets","tag-return-a-list-of-comma-separated-tags-from-this-title-maharlika-interested-in-chinese-stake-in-ngcp"],"yoast_head":"\nMaharlika Eyeing Chinese Investment in NGCP - WSJ-Crypto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wsj-crypto.com\/index.php\/2025\/01\/29\/maharlika-eyeing-chinese-investment-in-ngcp\/\" \/>\n<meta property=\"og:locale\" content=\"it_IT\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Maharlika Eyeing Chinese Investment in NGCP - WSJ-Crypto\" \/>\n<meta property=\"og:description\" content=\"By Aubrey Rose A. 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