Maharlika Drops ₱19.7 Billion Grid Investment After 21 Months of Talks

A promised government voice in the grid falls through

Maharlika Investment Corporation has withdrawn for now from a proposed ₱19.7 billion investment that would have secured two board seats each at Synergy Grid & Development Philippines Inc. (SGP) and the National Grid Corporation of the Philippines (NGCP). The decision came 21 months after President Ferdinand Marcos Jr. witnessed the agreement's signing at Malacañang on January 27, 2025.

SGP disclosed the withdrawal on October 30, following negotiations that had stretched beyond an initial target of 90 days and a later completion target of June 2026. Maharlika had planned to acquire a proposed 20 percent interest in SGP through newly issued convertible preferred shares.

The transaction would have combined a financial investment with a larger government presence inside the privately operated electricity transmission network. NGCP runs the system that moves electricity from power plants toward the distribution networks serving homes and businesses.

Maharlika said its decision followed continued evaluation as the transaction's terms developed during detailed negotiations. It cited its investment mandate, current priorities and responsibility to manage public funds prudently. SGP said the fund had decided against proceeding for the time being because of its current strategic direction.

Neither party disclosed the particular terms that prevented completion, including whether valuation, dividends or ownership rights became sticking points. Maharlika left open the possibility of returning to the investment, without giving a timetable. SGP said the withdrawal would have no effect on its financial position or on NGCP's operations and delivery of services.

What ₱19.7 billion would have bought

Maharlika's proposed investment was in SGP, the listed holding company associated with businessmen Henry "Big Boy" Sy Jr. and Robert Coyiuto Jr. The agreement involved newly issued shares, meaning Maharlika would have subscribed to shares created for the transaction.

The preferred shares were to carry an annual dividend of 6.5 percent for the first three years. Applied to the full ₱19.7 billion investment, that rate would equal about ₱1.28 billion a year, or approximately ₱3.84 billion across three years.

Preferred shares usually give investors specified financial rights, such as priority in receiving dividends. The proposed shares were also convertible, meaning they could become ordinary shares under agreed conditions. Conversion could have reduced existing shareholders' percentage ownership and their share of future earnings by increasing the number of ordinary shares outstanding.

The package also included two board seats at SGP and two at NGCP. Those positions were central to the government's stated aim of gaining greater access to information about the transmission business.

The January signing was a binding term sheet, which set out the transaction's principal terms. Completion still required further investigation of the business, final transaction documents and corporate and regulatory approvals. The ceremony therefore began a process with several remaining conditions.

How the ownership structure works

SGP has an effective equity interest of 40.2 percent in NGCP while indirectly controlling 60 percent of its voting shares. These percentages describe different things: an economic interest measures participation in the business's financial value, while voting rights determine influence over company decisions.

Filipino groups associated with Sy and Coyiuto control the 60 percent voting interest. China's State Grid Corporation holds the remaining 40 percent. Maharlika's planned 20 percent interest was in SGP, rather than a direct purchase of 20 percent of NGCP.

State Grid's direct NGCP stake was outside the proposed transaction. Maharlika chief executive Rafael Consing Jr. said in January 2025 that the fund's discussions focused on SGP and that it had not held talks with the Chinese shareholder. He expressed interest in State Grid shares if they became available.

Maharlika's entry would consequently have changed ownership and representation through the Philippine holding company, while leaving State Grid's direct stake in place. With the subscription now abandoned, those planned changes will not occur through this agreement.

How the deadlines slipped

Consing initially expected final transaction documents within 90 days of the January 2025 signing, with a possible extension. Preliminary due diligence had already been completed, he said at the time, but further examination of the investment was still required.

The negotiations continued through changes in the government's energy leadership and into the following year. The main milestones show how far the process moved beyond its original schedule:

• January 27, 2025: Consing and Sy signed the binding term sheet at Malacañang, with Marcos witnessing. Coyiuto and Alameda Energy were also parties to the agreement.
• November 2025: Energy Secretary Sharon Garin said Maharlika was still seeking documents from NGCP.
• March 2026: Consing identified June as the new completion target. Maharlika had yet to name its proposed NGCP board representatives.
• June 2026: The revised target passed without a completed transaction.
• October 30: SGP disclosed that Maharlika would not proceed for the time being.

The withdrawal also came as Consing approached the end of his three year term in November. No successor had been formally named when the decision was disclosed.

Why access to information mattered

Consing presented the proposed NGCP board seats as a way for the government to obtain operational information it previously lacked. Speaking in January 2025 as Maharlika's president and chief executive, he described the expected change:

"We're looking over the shoulder of the shareholders but the reality is that we had absolutely no access to such information and now we will have access to that information," Consing said.

Raphael Lotilla, then energy secretary, also said the investment would give the public a better view of NGCP's operations through government representation. Transparency was therefore part of the intended return, alongside dividends and potential investment gains.

Lawmakers had raised concerns about the Chinese shareholder's influence amid tensions between Manila and Beijing in the West Philippine Sea. Consing said at the January announcement that Maharlika saw no current external threat and had considered the concerns in its investment decision.

The withdrawal leaves the government without the additional board representation promised by this agreement. Maharlika nevertheless said its decision would not change the government's commitment to a secure and reliable transmission network.

The returns and valuation questions

NGCP's record of earnings and shareholder payments helps explain the financial attraction of the investment. Figures cited in a November 2023 investigation put its accumulated earnings since taking over the grid in 2009 at ₱286 billion, with ₱208 billion paid to shareholders as dividends during the period covered.

Those figures amount to roughly 73 centavos distributed for every peso of profit. For a prospective investor, dividend income would have been a substantial part of the business's appeal. For existing shareholders, issuing shares with conversion rights would have required weighing fresh capital against a possible reduction in their future percentage ownership.

Pricing was already a subject of debate before the term sheet was signed. In January 2025, investment fund manager Eric Jurado estimated SGP's fair value at ₱10.20 per share, using annual earnings growth of 4.4 percent over the previous five years. He projected an annual shareholder return of 10.4 percent over the next five years. Those were his estimates, rather than agreed transaction terms.

At that point, SGP's quoted market price was ₱12.90. Discussions about the owners' expectations placed their desired price closer to ₱20 per share, although that figure was not an announced agreement.

Jurado proposed a compromise involving ₱13.50 per share upfront, followed by additional payments if financial or operational targets were met over three to five years. Such a structure would tie part of the price to actual business performance. His proposal illustrates the pricing choices under discussion before signing; the parties' eventual reasons for stopping remain undisclosed.

What NGCP misses beyond the money

Financial expert Astro del Castillo said a government investment could have helped NGCP through closer policy coordination and fewer administrative delays. He placed that benefit ahead of the funding itself:

"The NGCP would have benefited more from a smoother bureaucracy such as policy coordination and action from a government presence rather than monetary gains," Del Castillo said.

Del Castillo identified regulatory processes, coordination with government and access to land for transmission projects as areas where the partnership could have helped. Such access, commonly called right of way, is needed to build power lines across the land along their routes.

Market analyst Toby Allan Arce said the investment could have improved financial flexibility and access to capital suited to projects that take years to deliver returns. He also said the withdrawal would not necessarily derail NGCP's operations or investment plans.

Arce identified financing, regulatory support and construction delivery as the practical tests for the grid operator:

"Ultimately, the more important consideration is whether NGCP can secure adequate financing, maintain regulatory support and deliver the infrastructure improvements needed to strengthen the reliability and capacity of the Philippine power grid," Arce said.

NGCP has invested more than ₱400 billion in transmission, according to company figures. Homes and businesses depend on the continued operation and development of that network regardless of who holds the shares. SGP said the withdrawal would leave NGCP's operations and service delivery unaffected.

Maharlika still owns SGP shares

Maharlika's decision applies to the proposed ₱19.7 billion subscription, while its separate investment in SGP shares purchased on the stock market remains in place. The fund had invested ₱1.2 billion in those shares and reported ₱589.2 million in dividends and unrealized gains for the year cited.

Dividends are payments received from a company. Unrealized gains are increases in the market value of shares still held, which can rise or fall before a sale. The combined figure therefore includes both income and changes in the value of the investment.

The proposed subscription was much larger, at about 16.4 times the ₱1.2 billion stock market investment. It also came with a negotiated package of board representation and preferred share rights.

Maharlika consequently retains financial exposure to SGP even as it steps away from the larger agreement. SGP said the decision would have no impact on its capital structure, financial position, business or operations.

A large commitment within a growing portfolio

Maharlika had invested ₱5.9 billion by the end of 2025 out of the initial ₱75 billion contributed by two government banks. That was about 7.9 percent of the initial funding.

By June 2026, cumulative capital deployment had risen to ₱24.7 billion, or about 32.9 percent of that initial amount. A ₱15 billion working capital facility for Petron accounted for roughly 61 percent of the deployed total. Working capital supports a company's routine operating needs.

The proposed SGP subscription alone equaled about 26.3 percent of Maharlika's initial ₱75 billion funding. Completing it would have represented a substantial commitment to one investment within the fund's developing portfolio.

Maharlika also held ₱53 billion in cash and cash equivalents as of June 2026. Cash equivalents are assets that can readily be converted into cash. The portfolio figures provide context for the size of the abandoned transaction, while the fund's stated explanation rests on its investment priorities and evaluation of the developing terms.

For electricity consumers, the immediate outcome is continuity: SGP says transmission services will carry on unchanged. For Maharlika, the decision preserves the money that would have gone into the subscription, while leaving its smaller listed shareholding intact. Any renewed effort to secure the proposed board representation would require the parties to return to negotiations.

Key Points

• Maharlika withdrew for now from a proposed ₱19.7 billion investment in SGP, 21 months after the January 2025 signing.
• The agreement would have provided a proposed 20 percent SGP interest and two board seats each at SGP and NGCP.
• The preferred shares carried a proposed annual dividend of 6.5 percent for the first three years.
• China's State Grid Corporation's direct 40 percent NGCP stake was outside the transaction.
• SGP said its finances and NGCP's operations and services would be unaffected.
• Maharlika retains its separate investment in SGP shares bought through the stock market.
• The parties disclosed no specific disputed terms or timetable for renewed negotiations.