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Philippines' wealth fund eyes Chinese company's shares in grid operator

The Philippines' sovereign wealth fund would be interested in purchasing a Chinese state firm's. stake in the Southeast Asian nation's power transmission. operator, its president said on Tuesday, as the federal government seeks. to improve its oversight of the nationwide power grid. The wealth fund, Maharlika Investment Corp, revealed on Monday. it would buy a 20% stake in the National Grid Corp of the. Philippines, or NGCP, which in 2007 won a 25year concession to. be the Philippines' sole power transmission operator.

Maharlika president and president Rafael. Consing Jr said the fund would likewise be interested in shares held. by China State Grid Corp, but kept in mind that taking control of NGCP. was not the fund's inspiration when it chose to purchase into it.

The goal was not to take control, however rather just. to be able to attain some level of influence, and you attain. that by method of your board seats, Consing informed a press. conference.

Some Philippine lawmakers have in recent years warned. about prospective security dangers from a Chinese state firm's. involvement in the power grid, as well as Chinese-backed players. in the telecoms market.

If it becomes available, I think so yes, Consing said when. inquired about the Chinese stake, adding no approach had actually been made. to the firm.

China's State Grid Corp could not right away be grabbed. remark.

China's State Grid has a 40% stake in NGCP, and the. remaining 60% is successfully managed by Synergy Grid &&. Development Phils Inc. (SGP) through a common business. structure of the latter's 2 biggest Filipino shareholders,. tycoons Henry Sy Jr. and Roberto Coyiuto Jr . Maharlika's interest comes at a time of heated maritime rivalry. and deepening mistrust of China, which has opposed some current. moves by the Philippines to improve its defence partnership with. ally the United States, consisting of usage of its Typhon missile. system.

NGCP is also presently the subject of a congressional probe. into its compliance with franchise responsibilities and its. ownership.

With a 20% stake, Maharlika will be able to subscribe to. preferred shares offered by SGP, which would give the wealth. fund two seats each at NGCP and SGP.

Consing stated Maharlika's existence in NGCP would also permit. the government to keep an eye on external dangers if such threats. undoubtedly arise.

Energy Secretary Raphael Lotilla at the same press. conference said the fund's participation in the grid would pave. the method to more efficient power transmission, potentially. reducing power costs.

Maharlika will acquire the favored shares for 19.7 billion. pesos ($ 336.64 million), which will offer the fund with an. annual 6.5% dividend yield for the first 3 years, Consing. said.

(source: Reuters)