AboitizPower to invest $579 million in AC Energy thermal platform

MANILA, Philippines — Aboitiz Power Corp. is investing $579.2 million (roughly P31 billion) in AC Energy Inc.’s thermal platform, which effectively raises the former’s stake in the GNPower plants it partly owns.

In separate disclosures yesterday, AboitizPower and AC Energy said they entered into a share purchase agreement for the proposed acquisition of a 49 percent voting stake and 60 percent interest in  Ayala power unit’s thermal platform under AA Thermal Inc.

AA Thermal’s assets include AC Energy’s limited partnership interests in GNPower Mariveles Coal Plant Ltd. Co., the owner and operator of an operating 2x316-megawatt (MW) coal plant in Mariveles, Bataan, and GNPowerDinginin Ltd. Co., the developer and owner of a 2x668 MW supercritical coal plant project in Dinginin, Bataan currently under construction.

The transaction is subject to the approval of the Philippine Competition Commission (PCC).

With the agreement, AboitizPower will increase its beneficial ownership in the Mariveles project from 66.1 percent to 78.325 percent, and in the Dinginin project from 40 percent to 70 percent. 

This leaves AC Energy with approximately 28 percent in both GNPower plants, broken down into eight percent in the Mariveles plant and roughly 20 percent in the Dinginin plant.

AC Energy president and CEO Eric Francia said the deal cements the company’s team up with the Aboitiz Group.

“We are delighted to further strengthen our partnership with the Aboitiz group and we look forward to jointly pursue more opportunities in the future,” he said.

The deal also gives the Ayala power unit more legroom to boost its renewable energy capacity.

“This transaction enables AC Energy to balance its portfolio and provides capital for our growth initiatives, including our renewable energy projects,” Francia said.

The Ayala group aims to boost its power capacity to 5,000 MW by 2025. It intends to meet this goal by investing in thermal and renewable projects here and abroad.

Prior to the transaction, AC Energy had a total attributable capacity of around 1,600 MW across its thermal and renewables platforms.

“After the sale, AC Energy’s thermal portfolio will decrease from 1,300 MW to around 800 MW,” Francia said in a text message.

Meanwhile, AboitizPower’s investment will help it get closer to its 4,000-MW net attributable target capacity by 2020.

“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. We are happy to be partners with the Ayala Group as we both seek to fulfill the energy needs of the country,” AboitizPower COO Emmanuel Rubio said.

ING Bank N.V. acted as lead financial advisor to AC Energy while BPI Capital provided transaction support to AC Energy.

Standard Chartered Bank, on the other hand,  acted as sole financial advisor to AboitizPower.