AboitizPower mulling options to finance acquisition of stake in AA Thermal

ABOITIZ POWER Corp. is considering whether to go back to the bond market or source funding from banks to pay for its acquisition of a bigger stake in the coal-fired power plant platform of Ayala-led AC Energy, Inc., the company’s finance official said.

“There are several options open to us,” Liza Luv T. Montelibano, AboitizPower senior vice-president and chief financial officer, told reporters during the listing of the company’s P10.2-billion fixed rate bonds on Thursday.

She said the company has a shelf registration of P30 billion for bonds, of which a first tranche last year amounted to P3 billion, leaving a remainder of P16.8 billion until 2019, the final year approved for the issuance.

“Whether we will get it as a third tranche, [whether] we’re getting it from another loan, we’re still finalizing,” Ms. Montelibano added.

For the second tranche, AboitizPower issued P7.7 billion in fixed rate bonds due on Jan. 25, 2024 at an interest rate of 7.5095% per annum, and P2.5 billion in fixed rate bonds due on Oct. 25, 2028 at 8.5091% per annum.

Ms. Montelibano said the funds raised from the offering will be used in part to refinance a loan for the acquisition of a power plant in Mariveles, Bataan.

In late 2016, AboitizPower subsidiary Therma Power, Inc. bought a 66.1% stake in GNPower Mariveles Coal Plant Ltd. Co. and 40% in GNPower Dinginin Ltd. Co. in line with its target to increase its energy capacity to 4,000 megawatts (MW) by 2020.

In September this year, AboitizPower bought voting and economic stakes in AA Thermal, Inc., the thermal power company of Ayala-led AC Energy, Inc. The acquisition will give it a 49% voting stake and 60% economic stake in the thermal platform.

GNPower Mariveles is the owner and operator of an operating two-unit coal plant in Bataan, each with a capacity of 316 MW. GNPower Dinginin is developing a supercritical coal-fired power plant with two identical units with a net capacity of 668 MW each.

AC Energy said once the transaction is completed, the acquisition will increase AboitizPower’s ownership in the Mariveles coal plant to 78.325%, and in the Dinginin coal plant project to 70%. The Mariveles plant has been operating since 2013, while the first unit of the Dinginin plant is expected to go online in 2019.

Closing of the transaction is subject to the satisfaction of certain conditions precedent, including the approval by the Philippine Competition Commission.

Ms. Montelibano said the need to fund the latest acquisition would come if the deal is approved by the antitrust watchdog.

She said AboitizPower is still aiming for a “balanced” energy mix even as the deal shifted its portfolio towards a greater share of facilities powered by coal.

“I will call it as balanced,” she said, adding that the nature of the business could result in a big shift in the mix as thermal plants have huge capacities as compared to those of renewable energy projects.

For now, she said the portfolio is tilted towards 75% coal plants and 25% renewables. She added that the company at present has an attributable capacity of 3,200 MW, although the target 4,000 MW is “in the bag” when the new power plants come online.

On Thursday, shares slipped 1.93% to close at P33 each. —