AboitizPower to raise up to P16.8B from bond offer

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ABOITIZ POWER Corp. (AboitizPower) is looking to raise up to P16.8 billion from the issuance of fixed-rate retail bonds within the second half of 2019.

In a disclosure to the stock exchange, AboitizPower said its board of directors approved the bond issue out of the P30 billion registered in 2017 under the Securities Exchange Commission’s shelf registration program.

The company said it expects to offer the retail bonds to the public in the second half. The bonds will be listed with the Philippine Dealing and Exchange Corporation (PDEx).

“Proceeds of the Third Tranche Bonds will be used to finance planned acquisitions, future investments, and/or other corporate requirements,” AboitizPower said.

AboitizPower issued the first tranche out of the shelf registered bonds on July 3, 2017 amounting to P3 billion, and the second tranche on Oct. 25, 2018 amounting to P10.2 billion.

“The Board of Directors delegated to Management the final determination of the issue amount, interest rate, offer price, tenors, and other terms and conditions of the Bonds including the parties that will manage or otherwise be involved in the offer,” it said.

For the second tranche, AboitizPower issued P7.7 billion in fixed rate bonds due on Jan. 25, 2024 at an interest rate of 7.5095% per annum, and P2.5 billion in fixed rate bonds due on Oct. 25, 2028 at 8.5091% per annum.

On Tuesday, shares in AboitizPower slipped by 0.78% to close at P38.10 each.

In October last year, Liza Luv T. Montelibano, AboitizPower senior vice-president and chief financial officer, said the need to fund the company’s latest acquisition would come if the deal is approved by the antitrust watchdog.

In September 2018, AboitizPower bought voting and economic stakes in AA Thermal, Inc., the thermal power company of Ayala-led AC Energy, Inc. The acquisition will give it a 49% voting stake and 60% economic stake in the thermal platform.

This followed AboitizPower’s acquisition in late 2016 of a 66.1% stake in GNPower Mariveles Coal Plant Ltd. Co. and 40% in GNPower Dinginin Ltd. Co. in line with its target to increase its energy capacity to 4,000 megawatts (MW) by 2020.

The two power plants are joint venture projects between AC Energy, AboitizPower subsidiary Therma Power, Inc. and other partners.

GNPower Mariveles is the owner and operator of an operating two-unit coal plant in Bataan, each with a capacity of 316 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 latest acquisition is completed, AboitizPower’s ownership in the Mariveles coal plant will increase 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.

Closing of the transaction is subject to the satisfaction of certain conditions precedent, including the approval by the Philippine Competition Commission. — Victor V. Saulon