Monday, August 26, 2013

in the news: gtcap, mbt (26 aug 2013)

Power shift
After selling a 20-percent stake in power generation unit global Business Power Corp. (GBPC) to Orix Corp. of Japan for P7.15 billion last June, the group of taipan George Ty is likely to consolidate the remaining stake held by the Metrobank group into conglomerate GT Capital Holdings.
Metrobank, through investment banking unit First Metro Investment Corp., has a remaining interest of 29.11 percent in GBPC, which means that it can still unlock more than P10 billion (based on the pricing of the most recent deal with Orix) in extraordinary gains this year by selling the residue to the parent.
The banking unit can choose to defer the sale to GT Capital until next year so as to cushion the expected decline in net profit next year after this year’s hefty extraordinary gains. But our sources say the more likely scenario is to complete the restructuring this year ahead of the implementation of stiffer capital adequacy ratio requirements under the Basel 3 framework.
The prospective transfer of the remaining stake in GBPC to parent firm GT Capital, which already controls 50.89 percent of the power-generation unit, relieves Metrobank from large capital calls inherent in a capital-intensive business like power generation. It also allows the Metrobank group to focus on its core business of banking, whereas previously serving as the de facto holding firm for the Tys’ non-allied businesses. GT Capital now aptly serves such purpose.
This 2013 is also the year that Metrobank could end the year as the most profitable bank in the country, dislodging Bank of the Philippine Islands. Full-year net profit this year is widely expected to exceed P20 billion, partly due to one-time gains from the sale of shares in the car and power-generation businesses. Doris C. Dumlao