With the resignation of two of its sitting directors at the board of the Manila Electric Company (Meralco), shareholder San Miguel Corporation (SMC) has named Elpi O. Cuna and Elenita D. Go as replacements.

Those who tendered their resignations are Meralco board directors Mario K. Surio and Alan T. Ortiz.

In a disclosure to the Philippine Stock Exchange (PSE), SMC noted that the replacement-directors shall “serve as such for the remaining term of the resigned directors until their successor are elected and qualified.”

The diversifying food and beverage conglomerate also noted that “the resignation letters of the directors concerned do not state any specific reason for their resignation.”

SMC is currently reeling from a botched takeover of the Meralco management, following the Lopez group’s rejection of the purchase offer of its ally investor Triratna Holdings. First Philippine Holdings Corporation preferred keeping its alliance with Metro Pacific Investments Corporation (MPIC) of business magnate Manuel V. Pangilinan.

SMC has been tugging its way into taking control of the country’s giant utility firm, but by all indications, it appeared that this is an elusive goal for it by now.

The wrestle for control at Meralco’s helm is heating up anew, with the revived incursion of the Government Service Insurance System (GSIS) questioning the recent deal between the Lopezes and MPIC.

SMC president Ramon Ang always indicated his company’s desire to corner more Meralco shares. Although action speaks louder than words, Ang is reticent in admitting that their end-goal would be to take over the company.

The more predictable regulatory regime that started impacting positively on Meralco’s balance sheet, according to analysts, thrived as the major factor enticing appetite for further investments in the distribution firm.

For years, the company suffered financial meltdown because of the series of unfavorable rulings, especially from the Courts, mandating it to refund mammoth amounts to customers.

Now that these “pay-back-to-customers regime” seem to be nearing its end, it was noted that Meralco’s financial performance will greatly improve in due time.

The utility firm started experiencing improvement in its cash flow following an undeterred implementation of its adjusted distribution charge under performance-based regulation since May this year.

Meanwhile, the First Pacific group and the Lopez Group have formally revised the conditions set over the sale of their stakes in Manila Electric Company as well as the extension of the term for the P11.2 billion loan included in the deal.

In a disclosure to the Philippine Stock Exchange, First Philippine Holdings Corporation of the Lopezes and First Pacific’s local unit Metro Pacific Investments Corporation have agreed to extend the term of the loan by three months to June 30, 2010.

FPHC said its wholly-owned subsidiary First Philippine Utilities Corporation has obtained a short-term loan in the amount of P11.2 billion from MPIC payable on or before June 30, 2010.

This is covered by a pledge over 30.09 million common shares in Meralco and 138.36 million shares in First Gen Corporation.

MPIC is borrowing P12 billion to fund the soft loan it is extending to First Philippine Holdings Corporation as part of the P22.4- billion deal to purchase an additional 6.7 percent in Meralco in five months.

According to MPIC, it will also be paying FPHC a yet undetermined amount for the call option which will allow MPIC to buy more time to raise funds by securing the purchase of the Meralco stake in escrow until March 31, 2010.