SGP Accepts MIC’s Binding Offer for Acquisition of Shares

Synergy Grid and Development Philippines Inc. (SGP) has accepted a binding offer from the state-run Maharlika Investment Corporation (MIC) for a 20 percent stake to secure a foothold in the National Grid Corporation of the Philippines (NGCP).

President Ferdinand R. Marcos Jr. witnessed the signing of the binding term sheet between SGP and MIC at the Malacañang Palace on Monday afternoon.

“Congratulations, everyone. I know it wasn’t easy. I think, in the end, we found a good solution to everyone’s concern,” President Marcos said during the signing of the agreement between MIC President and Chief Executive Officer Rafael D. Consing, Jr. and SGP Chairman Henry T. Sy, Jr.

MIC, mandated to manage the Philippines’ sovereign wealth fund, will subscribe to preferred shares offered by SGP.

SGP holds a 40.2% effective ownership interest in NGCP, the country’s power grid operator. Consing said the deal would grant MIC two board seats each at SGP and NGCP.

“Once the acquisition is completed, we shall be entitled to two out of nine seats in the SGP board, after the total seats are increased from seven to nine. At NGCP, the government gains representation through two out of 15 board seats, following an increase in the total seats from 10 to 15,” he said.

The maiden investment represents a vital opportunity for the government to regain greater influence over the nation’s critical power infrastructure to ensure that every Filipino has access to reliable and affordable power.

Since January 2009, NGCP has exercised full authority over the management and operations of the nationwide transmission system, a critical public utility, under a franchise granted by the Philippine Congress.

Consing stressed that the flagship investment would safeguard the nation’s power supply from external threats and disruptions, citing the need for the government to have a say in NGCP decisions.

In 2007, after public bidding, NGCP was granted a 25-year concession to operate the transmission system, with the possibility of renewal for an additional 25 years.

NGCP operates the country’s power grid, while the Philippine government owns the transmission assets through the National Transmission Corporation (TransCo).

TransCo is a government agency created under Republic Act. No. 9136, the Electric Power Industry Reform Act of 2001.