AboitizPower to acquire stake in Ayala thermal assets for $579M

By Victor V. Saulon, Sub-editor
ABOITIZ POWER Corp. has agreed to acquire a stake in the thermal power company of Ayala-led AC Energy, Inc. for $579.2 million, the two companies said on Thursday.
In a disclosure to the stock exchange, AboitizPower said it had entered into the share purchase agreement with AC Energy affiliate Arlington Mariveles Netherlands Holding BV and a shareholders’ agreement with Ayala Corp.’s energy investment arm. The proposed acquisition will give it a 49% voting stake and 60% economic stake in AA Thermal, Inc., AC Energy’s thermal platform in the Philippines.
The transaction comes about four months after AC Energy first announced it was selling as much as half of its thermal energy platform.
“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 Officer Eric T. Francia in a statement.
Mr. Francia noted the deal allows AC Energy to balance its portfolio and provide fresh funds for its renewable energy projects.
“AboitizPower 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,” said AboitizPower Chief Operating Officer Emmanuel V. Rubio in a statement.
AC Energy said its thermal platform initially consists of its partnership interests in GNPower Mariveles Coal Plant Ltd. Co. and GNPower Dinginin Ltd. Co.
GNPower Mariveles is the owner and operator of an operating two-unit coal plant in Mariveles, Bataan each with a capacity of 316 megawatts (MW). GNPower-Dinginin is developing a supercritical coal-fired power plant with two identical units with a net capacity of 668 MW each.
Once the transaction is completed, AC Energy the acquisition will increase AboitizPower’s ownership in the Mariveles coal plant to 78.325%, and in the Dinginin coal plant project to 70%.
The Mariveles plant has been operating since 2013, while the first unit of the Dinginin plant is expected to go online in 2019.
Luis A. Limlingan, business development head at Regina Capital Development Corp., said the deal is good for AboitizPower since it has an existing stake in Mariveles, thus giving it control over the project.
“For [AC Energy], they can focus on their other core competencies,” he said.
The transaction’s completion is subject to the satisfaction of certain conditions precedent, including the approval by the Philippine Competition Commission.
ING Bank N.V. acted as lead financial advisor to AC Energy. BPI Capital Corp. also acted as financial advisor, providing transaction support. Standard Chartered Bank acted as sole financial advisor to AboitizPower.