MANILA, Philippines — San Miguel Corp. will bid for the government’s 600-megawatt Calaca power plant as it seeks to shift its focus into heavy industry, company president Ramon Ang said Monday.
Southeast Asia’s largest food and drinks group would bid for the coal-fired plant at an auction in October, Ang confirmed by mobile phone text message, when asked to comment on an earlier Reuters story.
The government had set a floor price of $288 million when it tried to sell the plant last year.
The Calaca facility, in Batangas province south of Manila, will be auctioned on Oct. 16 in a third attempt to sell it. Investors were previously put off because the plant did not have a supply contract with the country’s biggest power distributor.
The government has since said it will guarantee a contract and earlier this month said 18 foreign and local investor groups had expressed interest in bidding for the plant.
San Miguel plans to spin off its domestic beer and regional packaging businesses and raise capital to fund its transformation into a conglomerate with investments in power, utilities, mining and infrastructure. It will seek shareholder approval of the proposal on Tuesday.
Ang has already secured approval from the company’s biggest stakeholders who own over 80 percent of the group, for the plan.
A source in San Miguel said the company wanted to bid for another coal-fired power plant — the 600-megawatt Masinloc facility — but did not make it to the pre-qualification deadline of May 8.
San Miguel announced its strategic shake-up the same day.
The Masinloc plant will be auctioned later this month.
San Miguel also confirmed in a statement on Monday it was studying a possible investment in ethanol production as part of its “strategic supply assurance” for its liquor arm Ginebra San Miguel.
A local newspaper reported San Miguel was eyeing sugarcane lots totaling 76,000 hectares in three provinces on the main island of Luzon and one province in the central Philippines for ethanol production. It said San Miguel would need to invest between P8.68 billion and P16.28 billion for the ethanol plants, which it said were targeted to have a combined capacity of one million liters per day.
Ang, who is seen as the driving force behind San Miguel’s shift into heavy industry, was part of a consortium that attempted to bid for a license to run the national power grid in a failed auction in February.
But he will not be able to take part in another bid for the national grid license if San Miguel buys a power plant in the Philippines because cross-ownership in the power sector is illegal.
San Miguel’s Class A shares, which are restricted to domestic investors, finished flat Monday at P74. Its Class B stock, open to all, was 0.61 percent weaker at P82 in a main index, down 0.01 percent.