San Miguel unit to purchase Masinloc Power for $1.9B
By Lenie Lectura – December 18, 2017
from Business Mirror
SMC Global Power Holdings Corp. (SMCGPH), the power arm of conglomerate San Miguel Corp., is buying Masinloc Power Plants Co. Ltd. (MPPCL) for $1.9 billion.
MPPCL is 51-percent owned by AES Philippines Investment Pte. Ltd., a wholly owned subsidiary of AES Corp., and 49-percent owned by Gen Plus B.V. The latter is a wholly owned subsidiary of Electricity Generating Public Co. Ltd (Egco).
MPPCL owns, operates and maintains a coal-fired power plant comprising of two units of 315 megawatts (MW), a 335-MW expansion (unit 3) still under construction and a 10-MW battery-energy storage facility. All these power plants are located in Zambales province.
SMCGPH said on Monday it has reached a deal to buy the 630-MW Masinloc power plant for $1.9 billion through a share-purchase agreement with Masin-AES Pte.Ltd equity holders AES Philippines Investment Pte. Ltd. and Gen Plus B.V.
The implied enterprise value of the company based on the transaction is at $2.4 billion.
The sale also includes the 335-MW coal-fired unit that is currently under construction and the 10-MW Masinloc energy-storage project under commissioning.
The new unit will employ the supercritical boiler technology that will result in higher efficiency and significant reduction in carbon dioxide emissions.
“We are happy to be able to acquire Masinloc. The additional power assets provide us an opportunity to increase our footprint in clean coal technology that provides reliable and affordable power, particularly in Luzon,” SMC President and COO Ramon S. Ang said. “In fact, we have substantially reduced emissions even from our existing power plants to continue promoting the economy’s growth and produce energy in an environmentally responsible way.”
The completion of the agreement is subject to the satisfaction of certain conditions, including the approval of the Philippine Competition Commission and the final execution of the definitive agreements.
Egco’s 49-percent stake is worth $850 million. According to Egco President Jakgrich Pibulpairoj, the divestment was approved by the board on November 29. He said the transaction is expected to close in the first half of 2018.
Egco said proceeds from the sale will be used to develop new investment opportunities for the company.
