Tuesday January 20, 07:33 AM
San Miguel eyes more utilities after planned brewery sale
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MANILA (AFP) - San Miguel Corp., one of the Philippines' largest companies, said Tuesday it is planning to add to its power utilities after a deal to sell a large chunk of its brewing business.
A San Miguel unit, San Miguel Energy Corp., has notified the government it intends to bid for the 620-megawatt Bataan Combined Cycle Power Plant at the mouth of Manila Bay, the parent told the stock exchange in a disclosure letter.
The government is selling off the plant and a number of other National Power Corp. generating facilities as part of a strategy to privatise the sector.
The national transmission grid has already been sold off to a consortium led by a Chinese state firm.
San Miguel and Japan's Kirin Holdings Co. Ltd. announced on Monday that they had signed an agreement to negotiate the sale of up to 43.25 percent of San Miguel Brewery Inc to the Japanese firm by February.
A deal for the brewery would leave San Miguel Corp. -- Southeast Asia's largest food and beverage group -- with a 51 percent stake.
Kirin separately holds a 20 percent stake in San Miguel Corp.
San Miguel last year bought a 27 percent stake in top power distributor Manila Electric Co. and has also taken control of Petron Corp., the country's top oil refiner.
The beverage giant also announced last year that it would explore an alliance with Indonesia's PT Bumi Resources (BUMI.JK - news) , which owns the world's largest thermal coal exporter, Kaltim Prima Coal.
San Miguel president Ramon Ang told Dow Jones Newswires that it is also planning to sell within the year portions of its shareholdings in its food and packaging businesses.
"As a policy, San Miguel will sell shares in all operating companies and just keep 51 percent consolidated control," he added.
He said proceeds from the divestments would be used to pay debt as well as finance the company's expansion into heavy industries.
San Miguel had total long-term debt of 923 million dollars as of the end of September 2008.
Despite the recent investments, San Miguel insists it has not violated any of its loan covenants, including a ban on investing more than 10 percent of its assets outside its core business of food, beverage and packaging.
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