AEV subsidiary obtains P9-B loan for bulk water project

Font Size


By Victor V. Saulon, Sub-editor

ABOITIZ EQUITY Ventures, Inc. (AEV) on Monday said it is borrowing P9 billion from several banks for its bulk water project in Davao City.

In a disclosure to the stock exchange on Monday, the listed conglomerate said subsidiary Apo Agua Infrastructura, Inc. signed an omnibus notes facility and security agreement for the P9-billion loan with a consortium of lender-banks.

The loan will be used for the Apo Agua project, a bulk water system with a capacity of treating 347 million liters of water per day, and an integrated 2.5-megawatt hydro-electric power plant.

“This is our first bulk water project. But we’re looking in quite a few,” AEV Chief Financial Officer Manuel R. Lozano said in an interview ahead of the signing of the loan agreement.

He said the Apo Agua project is now underway, with the engineering, procurement and construction (EPC) contract signed.

“Very soon, we’ll be ordering a lot of equipment,” said Mr. Lozano, who is also AEV chief information officer. “Once we signed the EPC [contract], I guess that’s the trigger.”

Aside from the bulk water project, AEV also has a stake in water distribution in San Fernando, Pampanga and in Malvar, Batangas.

“In water, [either] you’re the bulk supplier or you’re the distributor. In this particular case, we’re the source of the water. We’re delivering it to Davao City Water District, and sila ang nagdi-distribute (they distribute),” Mr. Lozano said.

“We need more bulk water projects, maybe desalination, maybe other types of ways to get clean potable water. So this is our first but we have a team that’s focused on water and they’re looking at several other projects as well. I cannot tell you for sure if it will happen in the next year or so, but definitely we’re trying. We’d like to have more,” he added.

Mr. Lozano said AEV is not focused on a specific area in the Philippines for its next water project, but the provinces and cities surrounding Davao City would be ideal.

“But the reality is we’re looking in the Visayas, we’re looking in Luzon, sa tingin ko (in my view) wherever the opportunity comes because I really think the issue is there’s demand across the Philippines,” he said.

For the Apo Agua loan facility, the consortium of lender-banks is composed of BPI Capital Corp. as mandated lead arranger and bookrunner; China Bank Capital Corp. as join lead arranger; Bank of the Philippine Island, China Banking Corp., Development Bank of the Philippines, and Bank of Commerce as initial note holders; and BPI Asset Management and Trust Corp. as trustee and notes facility agent.

AEV has partnered with JV Angeles Construction Corp. for the bulk water project as it builds expertise in the water sector.

“We’ve been doing hydro-electric projects for many years. So we have some expertise in managing the distribution of water, building the pipes. But we don’t have the construction expertise, that’s where JV Angeles comes along,” Mr. Lozano said.

On Monday, shares in AEV rose 1.34% to close at P52.90 each.