Pandemic stalls AboitizPower’s asset sale in Batangas

MANILA, Philippines — Aboitiz Power Corp. said the pandemic has stalled its plan to unload its 8.8-megawatt (MW) biomass power plant assets in Lian, Batangas.

AboitizPower president and CEO Emmanuel Rubio said they have received serious interests to buy the equipment in the biomass plant.

However, inspection and due diligence on the power facility have been delayed due to travel restrictions because of the COVID-19 pandemic.

“Actually, we have serious buyers, but they cannot do due diligence on the equipment because they cannot travel, specifically on the engines,” Rubio said.

Currently, the company has ongoing discussions to sell equipment and the land of the biomass power plant.

“We have discussions now. There are certain parties that started expressing interest on the land, before it was just the equipment,” Rubio said.

The 8.8-MW biomass plant is the AboitizPower’s first biomass project, which was supposed to start commercially operating in the second quarter of 2017.

It is under Aseagas Corp., a wholly owned subsidiary of AboitizPower through Aboitiz Renewables Inc., its holding company for its investments in renewable energy.

However, Aseagas permanently ceased operations of the facility in January 2018. Before that, the plant was previously placed on extended shutdown toward the end of 2017 due to lack of feedstock.

As a result of the closure, total value affected is estimated to be at P3.7 billion, which represents Aseagas invested equity of P3.45 billion and the company’s estimated remaining obligations of around P250 million.

In May 2018, AboitizPower announced plans to sell the biomass power project after it decided to stop operating the facility.

The company had set an end-2019 deadline to unload its biomass power plant assets.

AboitizPower then hired Astoca Inc. in 2019 to sell the Aseagas assets. Astoca – short for “assets to cash” – is a leading industrial asset disposal and valuation advisory company in Asia.

The contract with the advisory company, however, expired even before the assets have been sold.