AboitizPower-Hanjin Shipping power deal to end

By Jordeene B. Lagare – January 16, 2019
From The Manila Times

Aboitiz Power Corp. said it would not seek to extend its deal to supply electricity to Korean-owned, Subic-based shipbuilder Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), which recently defaulted on its loans.

Under the agreement signed by AboitizPower-owned distribution utility Subic EnerZone Corp. and HHIC-Phil in 2008, the former would supply an initial 4 megawatts (MW) of power. It is set to end in February.

The power firm decided not to renew that contract after it declined to join in September a bidding to supply electricity to the troubled shipmaker for a price deemed “too low.”

“They’re (HHIC-Phil) really looking for a competitive price, which we feel is just too low for us,” AboitizPower Chief Operating Officer Emmanuel Rubio told reporters on Tuesday without revealing pricing details.

“I guess the reason why we felt it’s better for us not to make an offer is that it’s lower than our forecast for WESM (Wholesale Electricity Spot Market),” he said. “We’re better off selling to WESM than offer it to them or offer it to somewhere else.”

According to him, HHIC-Phil’s power demand, which once peaked at 65 MW, has been declining over the last few months by 20 to 30 percent.

His remarks came after the local subsidiary of South Korean conglomerate Hanjin filed for corporate rehabilitation last week. It reportedly owes Land Bank of the Philippines, BDO Unibank Inc.,
Rizal Commercial Banking Corp., Metropolitan Bank & Trust Co. and Bank of the Philippine Islands about $412 million in addition to another $900 million to South Korean creditors.

Incorporated on Feb. 13, 1998, AboitizPower is the holding company for the Aboitiz Group’s investments in power generation, distribution and retail electricity services. The listed firm has interests in both renewable and non-renewable generation plants.

Shares of AboitizPower ended flat at P37 each on Tuesday.