By Arra B. Francia, Reporter
ABOITIZ EQUITY Ventures, Inc. (AEV) is looking to allocate up to P60 billion to fund the expansion of its power, food, banking, land, and infrastructure businesses in 2019.
“We haven’t finalized yet…but (2019 capital expenditures) would probably be in the range of P50 to P60 billion,” AEV Chief Financial Officer Manuel R. Lozano said during a round table interview in Taguig City last week.
The 2019 capex is lower than the P77 billion AEV has committed to spend in 2018. Mr. Lozano noted the company has only spent about three-fourths of this budget, since some projects have spilled over to 2019.
“(The) bulk (of capex) will be for power, but now we already have Apo Agua for water, that’s gonna be big also. (AboitizLand) has several projects that we started. So I think now you’re going to see a little bit more from the other subsidiaries,” Mr. Lozano said.
Apo Agua is AEV’s bulk water project in Davao City worth about P13-14 billion. It was designed to have a capacity of 347 million liters per day, making it the largest bulk water project in the country. The facility also comes with a 2.5-megawatt hydro-electric power plant.
The bulk water project is scheduled to start operations in 2021.
For its power unit, AEV is looking at more renewable energy projects at the local front while also exploring opportunities abroad.
“We really want to look at more projects in the solar side. There’s a lot of opportunities there. We’re bringing guys who understand hydro, solar, and wind… at least get them moving in 2019,” Mr. Lozano said.
The AEV executive also said the company is upbeat on potential projects in Indonesia, Vietnam, Malaysia, and Myanmar.
“In Vietnam, they have a lot of solar, wind projects that we’re looking at. And Indonesia all kinds, from geothermal, to solar, to hydro, so we’d like to see where we can do things.”
Meanwhile, AboitizLand, Inc. also has some projects lined for its nationwide expansion in 2019. Mr. Lozano said the property developer is looking at new township developments in Cebu and Davao, alongside some land banking efforts.
AboitizLand has recently opened The Outlets at Lipa, a 9.3-hectare commercial, lifestyle, and leisure development in Batangas. The property opened with 25% of its total gross leasable area of about 27,000 square meters leased out, with more to tenants to expected to locate there in the first quarter of 2019.
To finance its 2019 capex, Mr. Lozano said they are planning to file a shelf registration for about P30 billion worth of retail bonds at the Securities and Exchange Commission.
“Our plan is to do a shelf, get it already started next year, and then depending on our investments we can either do a bigger offering later in the year or in 2020… The shelf lasts for three years, so I think P10 billion a year on average is not unreasonable especially since we’re still growing a lot of our business,” Mr. Lozano said.
AEV is also expected to close a $579-million (around P30.6 billion) loan from several banks by the first quarter of 2019. This will finance its acquisition of GNPower Mariveles Coal Plant Ltd. Co. and GNPower Dinginin Ltd. Co. from the Ayala group.
“But we’re going to hedge some of it. We’re trying to match it with the cash flows from the company as well. It’s a dollar borrowing, the only question is how much do we hedge to peso,” Mr. Lozano said.
AEV booked a net income of P17.3 billion in the first nine months of 2018, nine percent higher year-on-year, on the back of a 21% uptick in gross revenues to P135.25 billion.