AEV sells up to 27% stake in AboitizPower to JERA

Iris Gonzales - The Philippine Star

MANILA, Philippines — Aboitiz Equity Ventures Inc. (AEV), the listed Cebu-based conglomerate, is selling up to a 27 percent stake in Aboitiz Power Corp. to Japanese power generation firm, JERA Co. Inc., in a deal that would raise at least $1.463 billion for the Aboitiz Group.

The Aboitiz Group and JERA have identified areas for collaboration across multiple fronts, including LNG-to-power projects and exploration of the use of new generation technologies.

The offer price of P40 per share is at a premium or 16.9 percent from AboitizPower’s closing price yesterday of P34.20.

AEV will sell a 25.01 percent stake in Aboitiz Power to JERA Asia, a wholly-owned subsidiary of JERA Co. Inc. while the Aboitiz family’s privately held parent company has agreed to sell an additional 1.99 percent stake in Aboitiz Power, which would translate to a 27 percent stake for JERA.

Upon completion of the transaction, which is subject to regulatory approvals and anti-trusts clearance, AEV will still own a majority stake in AboitizPower, amounting to 52 percent from 77 percent prior to the deal.

The transaction between AEV and JERA covers 1.8 billion common shares in AboitizPower, representing a 25.01 percent stake in the power company while the transaction between the Aboitiz family and JERA covers the equivalent of a 1.99 percent stake in Aboitiz Power.

JERA’s entry is expected to translate to two board seats in AboitizPower.

With a stronger and bigger war chest from the proceeds of the sale, AboitizPower will likely increase its stake in existing power plants, analysts said.

One possibility is in Pagbilao Energy Corp. where JERA’s Philippine affiliate, TPEC Holdings Corp. and AboitizPower’s holding company for its thermal power generation assets Therma Power Inc. are joint venture partners.

“This transaction unlocks significant capital that will be used toward fueling the AEV Group’s growth initiatives. Most importantly, we look forward to the new strategic partnership with JERA as we welcome their trust, expertise, and commitment to help the AEV Group drive change for a better world by accelerating Philippine economic growth and promoting the development of clean energy,” Aboitiz Group president and CEO Sabin Aboitiz said.

Aboitiz Power aims to increase its generation portfolio to 9,200 MW.

“We look forward to working collaboratively with JERA to achieve our 10-year vision of increasing our generation portfolio to 9,200 MW, by adding 3,700 MW of RE capacity resulting in a 50:50 balance between our Cleanergy and thermal portfolios,” AboitizPower president and CEO Emmanuel Rubio said.

AEV is the public holding company of the AEV Group with major investments in power, banking and financial services, food, infrastructure, and land.

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