AboitizPower mulls IPO of subsidiary

MANILA, Philippines — Aboitiz Power Corp. is considering listing a subsidiary once the right opportunity comes, with its renewable energy unit Aboitiz Renewables Inc. (ARI) currently the front runner.

“It’s always an option that is open for us. So we’re looking at it,” AboitizPower president and CEO Emmanuel Rubio said. The company  plans to do an initial public offering (IPO) for one of the company’s subsidiaries.

“What investors would be valuing is our current assets, our ability to execute to meet your commitments, and the value of our pipeline moving forward. With the value  of the assets that’s a box ticked. A history of execution maybe that can be ticked. But the pipeline, that’s something that we are developing,” he said.

Rubio said the potential IPO will be pursued “if there is really a need.”

“We also need to consider the implications to AboitizPower if we list ARI,” he said.

AboitizPower is a publicly listed company that serves as the holding firm for the Aboitiz Group’s investments in power generation, distribution and retail electricity services.

AboitizPower’s investments and interests in various renewable energy projects, including geothermal, large hydro, run-of-river hydro, and solar projects are held primarily through wholly owned subsidiary ARI, which was incorporated in 1995.

Its renewable energy portfolio, in operation as of end-February, consisted of net sellable capacity of approximately 1,249.17 megawatts (MW), divided into 46.80 MW of solar, 912.37 MW of hydro, and 290 MW of geothermal.

ARI is actively developing more solar, wind, hydro and storage projects as part of AboitizPower’s 10-year strategy of growing its renewable energy capacity, as well as striking a 50:50 balance between its Cleanergy and thermal portfolios.

“I supposed the advantage is there are investors today that they want pure renewables. Then we open a door if we do ARI (IPO),” AboitizPower chief financial officer Liza Montelibano said.

“Doing an IPO requires timing. If it’s at a point that the price that we can command for our pipe already gives us a premium with a stock price when we go public, then we’ll do it then. But I guess it’s really about trying to see what’s the best way to optimize value from the fact that we have this existing portfolio plus a good pipeline,” she said.

AboitizPower targets to spend around P190 billion over the next decade for an additional 3,700 MW of renewable energy, growing its capacities to 4,600 MW or three times the company’s current renewables portfolio by 2030.

“We think that the discourse around renewables is changing globally. With everything that’s happening now and where energy security is becoming the focus, and where I think the world is waking up to the fact that renewables is not the silver bullet to a very complex problem, so it’s also a good opportunity to wait and see and see how the market evolves,” AboitizPower chief corporate services officer Carlos Aboitiz said.