INVESTORS pocketed gains in Aboitiz Power Corp. last week after its parent holding firm announced the sale of up to 27% stake in its listed energy arm to Japan’s largest power generation company for nearly $1.5 billion.
A total of 49.88 million AboitizPower shares worth P1.59 billion were traded from Sept. 27 to Oct. 1, data from the Philippine Stock Exchange showed.
The share price of the Aboitiz group’s holding company for its energy-related businesses closed at P31.65 apiece on Friday, down by a peso or 3.1% from the P32.65 finish on Sept. 24. It has gained 17.2% since the start of the year.
“Investors took profit after the news came out of Aboitiz [Equity Ventures, Inc. (AEV)] selling 25% stake to Japan’s JERA [Co., Inc.],” Mercantile Securities Corp. Analyst Jeff Radley C. See said in an e-mail interview.
AEV approved on Sept. 27 the sale of a 25.01% stake in AboitizPower to JERA Asia Pte. Ltd., a wholly owned unit of Japan’s JERA Co.
The Aboitiz family’s privately held company also agreed to sell an additional 1.99% stake in the power holding firm.
Once done, JERA would own 27% of AboitizPower, while AEV will keep the majority at 52% from 77% previously.
The $1.463-billion deal is still subject to a slew of regulatory approvals, including those of stockholders in a special meeting on Dec. 9.
JERA — a joint venture between Japanese electric companies Tokyo Electric Power Group and Chubu Electric Power Group — is Japan’s largest power generation company and produces about 30% of its electricity.
It will also be working with AboitizPower for the latter’s clean energy projects, among others.
Following the announcement, AboitizPower shares dipped by 9.6% and 3.6% on Tuesday and Wednesday, respectively, to P30.90 and P29.80 from P34.20-per-share finish on Monday.
This prompted AEV to reassure investors on Tuesday that the JERA deal will be used to bankroll other Aboitiz businesses or to refinance existing debt. It will also bring in “a very strong partner” for AboitizPower.
“Long term, this will bode well for Aboitiz group since it can get some expertise or know-how from Japan’s JERA in the power-generation sector,” Mercantile Securities’ Mr. See said.
“With the transaction, Japan’s JERA Co. may contribute to optimize the resources of [AboitizPower] to build the almost 4,000 MW (megawatts) of renewable energy within in 10 years through technology transfer attune to the times…,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.
AboitizPower is looking to build about 3,900 MW of renewable energy in the next 10 years, bringing its portfolio to 9,200 MW, to achieve a 50:50 renewables and thermal capacity mix.
In the first semester, its attributable net income grew by 2.7 times to P10.13 billion from P3.74 billion a year ago.
Mr. Pangan sees AboitizPower’s bottom line to grow by double-digits to about P20 billion by yearend.
“For [the third quarter], though restrictions are longer due to the Delta variant but with better mobility, we may continue to see sustained growth in its bottom line with better [Wholesale Electricity Spot Market] prices as compared to last year, better hydroelectric performance on higher water levels, and commissioning of GNPower Dinginin Unit 1 at 668-MW rated capacity in the [second quarter],” he said.
This week, Mr. See expects AboitizPower to move sideways between P30 and P35 a share.
Mr. Pangan gave his support and resistance at P29.60 and P35.10, respectively.
“[This] week, we may continue to see rebound in the price of AboitizPower after the profit taking [last] week due to a volatile market,” he said. — Bernadette Therese M. Gadon