Ayala eyes partial sale of thermal energy business

AYALA-LED AC Energy, Inc. is looking to sell as much as half of its thermal energy business and possibly raise up to $1 billion in part to raise capital to support the company’s regional growth.

“While we will grow our renewables exponentially, we shall continue to grow our thermal platform in the Philippines and around the region,” said Eric T. Francia, AC Energy president and chief executive officer, in a statement on Sunday.

AC Energy said aside from raising capital, the move to sell some of the company’s energy assets is meant to balance its renewables and thermal portfolios.

“AC Energy is currently in discussions with potential investors/partners for our thermal platform,” Mr. Francia said.

AC Energy has a total attributable capacity of around 1,600 megawatts (MW) across its thermal and renewables platforms.

The company did not disclose the expected value of the sale but based on a report by investment bank CLSA Ltd., which evaluated the subsidiaries of listed conglomerate Ayala Corp., the valuation of AC Energy’s attributable capacity is P135 billion or around $2.6 billion.

Of the $2.6 billion, 80% or $2 billion is thermal assets, giving AC Energy around $1 billion should it reach the full 50% target sale of that attributable capacity, or the corresponding megawatts of the company’s share in the projects in which it has participating interest.

A source at AC Energy confirmed the CLSA report, adding that it is for the use of the conglomerate’s investor relations group.

In January, AC Energy created two wholly owned units — AC Renewables, Inc. for renewable energy, and ACE Thermal, Inc. for thermal energy.

For the first quarter, parent Ayala Corp. said AC Energy’s profits nearly doubled to P593 million, lifted by its investments in Indonesia, as well as its thermal and renewable platforms.

AC Energy targets to develop by 2020 up to 2,000 MW of capacity, of which 1,000 MW is targeted to come from renewable energy.

It previously said that 20% of the company’s roughly $1-billion energy investments was placed in Indonesia.

Aside from the 75-MW Sidrap wind farm joint venture project in South Sulawesi, Indonesia, AC Energy also acquired Chevron Corp.’s geothermal operations in that country.

In the Philippines, AC Energy has a 20% stake in the 632- MW GNPower Mariveles Coal Plant Ltd. Co.; 50% in the 668- MW GNPower Dinginin Ltd. Co.; 35% in the 244- MW South Luzon Thermal Energy Corp.; and 85% in the 552- MW GNPower Kauswagan Ltd. Co.

Its 19.8% stake in the 637-MW geothermal steam and power capacity in Darajat and Salak geothermal fields along with its 75% stake in the 75-MW wind farm project in Sidrap more than doubled the company’s clean energy capacity to at least 264 MW. —