* Stock sold at large discount
* Money seen going towards other expansion plans (Recasts and adds details on investment plans)
By Erik dela Cruz
MANILA, July 19 (Reuters) - Philippine conglomerate San Miguel Corp sold a portion of its stake in Manila Electric Co (Meralco) at an 11 percent discount to market prices, raising $400 million to fund expansion plans that include a beefing up of other power assets.
The sale comes at a time when San Miguel has begun work on a new coal-fired plant that needs heavy investment and as the acquisitive company continues to look overseas for possible new ventures.
“They have been planning to sell their Meralco shares and maybe they can put the money in other investments which they control,” said Joseph Roxas, president of brokerage Eagle Equities in Manila.
He noted that current market volatility had made it difficult to command a premium.
San Miguel sold 5.7 percent of Meralco at 270 pesos per share, compared with its last closing price of 302.4 pesos and cutting its stake in Mercalco to 27.1 percent.
Shares in Meralco fell as much as 9 percent to as low as 275 pesos, their lowest in six months. San Miguel was down 3.8 percent by the midday break on Friday.
San Miguel had originally planned to sell 46 million to 48 million shares at 270-280 pesos each, with an upsize option to raise an additional $75 million, according to IFR, a Thomson Reuters publication.
The conglomerate said on Thursday its unlisted power unit, SMC Global Power Holdings Corp, has started building a 600-megawatt coal-fired power plant in Mindanao to help address the island’s growing power crisis.
SMC Global, the country’s biggest power producer with an installed capacity of 2,545 MW, plans to expand its capacity by 3,000 MW over the long term, an investment expected to total $6 billion.
SMC Global may also list later this year, San Miguel President Ramon Ang said recently.
San Miguel, which started as a brewery more than a century ago, has aggressively expanded over the last four years into power, airlines, mining, telecoms, oil refining and distribution, and infrastructure. (Editing by Edwina Gibbs)