Aboitiz Power buys Ayala’s coal projects for $579.2m

By Alena Mae S. Flores – September 27, 2018 at 08:45 pm
from manilastandard.net

Aboitiz Power Corp. acquired a 49-percent voting interest and 60-percent economic stake in AA Thermal Inc., Ayala Group’s thermal or coal asset platform in the country, for $579.2 million (P31.4 billion), the two companies said Friday.

The sale involves around 500 megawatts of coal capacity out of AC Energy Inc.’s total 1,300-MW coal platform.

Aboitiz Power and Arlington Mariveles Netherlands Holding B.V., an affiliate of AC Energy, the power unit of Ayala Corp., signed a share purchase agreement on Sept. 26.

“Aboitiz Power is committed to addressing the country’s energy trilemma of adequate supply, cost of power and protection of the environment. This is part of our strategy to reach our 4,000-MW net attributable capacity by 2020 through our balanced mix strategy. We are happy to be partners with the Ayala Group as we both seek to fulfill the energy needs of the country,” Aboitiz Power chief operating officer Emmanuel Rubio said.

The parties expect to close the acquisition shortly after obtaining clearance/approval from the Philippine Competition Commission.

The AA Thermal platform will initially consist of AC Energy’s limited partnership interests in GNPower Mariveles Coal Plant Ltd. Co., the owner and operator of an operating 632-megawatt coal plant in Mariveles, Bataan, and in GNPower Dinginin Ltd. Co., the developer and owner of a 1,336-MW supercritical coal plant project in Dinginin, Bataan, which is currently under construction.

Once completed, the acquisition will increase Aboitiz Power’s ownership in the Mariveles coal plant to 78.325 percent and in the Dinginin coal plant project to 70 percent. The Mariveles coal plant has been operating since 2013, while the first unit of the Dinginin coal plant project is scheduled to go online in 2019.

AC Energy’s thermal portfolio, however, will decrease to 800 MW from 1,300 MW.

“We are delighted to further strengthen our partnership with the Aboitiz group and we look forward to jointly pursue more opportunities in the future,” said AC Energy president and chief executive Eric Francia.

“This transaction enables AC Energy to balance its portfolio and provides capital for our growth initiatives, including our renewable energy projects,” Francia said.

Aboitiz Power will pay AC Energy a one-time lump sum payment at closing for a total consideration of $579.2 million.

ING Bank N.V. acted as the lead financial advisor to AC Energy.  BPI Capital also acted as financial advisor, providing transaction support to AC Energy.  Standard Chartered Bank acted as the sole financial advisor to Aboitiz Power.

AC Energy announced in May that was considering selling as much as 50 percent of its coal assets to balance its portfolio.

AC Energy’s thermal or coal portfolio is at 1,300 MW, accounting for around 80 percent of its attributable energy assets totaling 1,600 MW. The remaining 300 MW capacity includes geothermal, wind and solar power projects.