Prospective deal seen to fastrack MRC transformation

As published on Business Inquirer

Investment holding firm MRC Allied is in advanced discussions to acquire an operating renewable energy firm which can add close to a billion peso in annual revenue to its energy business.

MRC, aiming to transform itself into an energy holding firm, plans to build a pipeline of at least 200 megawatts of power generation capacity this year. This is in line with the five-year target to have an installed capacity of 1,000 MW.

Gladys Nalda, a former Department of Energy official and now MRC president, said the group was in talks with several groups but there was one deal that might be firmed up “within the next couple of days.”

If this deal pushes through, MRC will be able to exceed its 200-MW capacity buildup goal this year, she said.

The group has two greenfield solar farm projects that will bring online 160 megawatts of capacity in the years ahead. One is a P3-billion 60-MW project in Naga City, Cebu while another is a P5-billion 100MW solar farm project in Clark Green City.

The prospective acquisition involves an operating company that can thus immediately contribute earnings as soon as it is consolidated into the company. This means that instead of waiting for 2019 for its solar farms to be operational, its transformation into a renewable energy enterprise will be achieved earlier.

Nalda said the selling group was offering its entire holdings but she preferred that MRC would increase its interest on a staggered basis. However, she said MRC would immediately want to take a controlling interest.

The company churns out an annual net profit of P400 million on the back of P800 million to P900 million in revenue. Cash flow based on earnings before interest, taxes, depreciation and amortization is estimated at P700 million.

But MRC is also in talks with some other groups. However, she said she could not give more details due to non-disclosure agreements.