AEV eyes 160-B capex, funded by loans, bonds

Aboitiz Equity Ventures Inc. is planning to allot 150 billion to 160 billion for capital expenditures in 2019, similar to the amount it expects to spend this year, mainly for its power and water businesses.

In an interview, AEV Chief Financial Officer Manuel Lozano said that“at this point in time, I think we’ve already spent about maybe three-fourths of what we’re expecting to spend. Some of the projects have spilled over to 2019.”

Lozano said the bulk of next year’s capex “will be for power, but now we already have Apo Agua for water – that’s going to be big also. Land has several projects that we started. So I think now you’re going to see a little bit more from the other subsidiaries.”

For AEV’s power business, Lozano said “one transaction that hasn’t been completed yet is the GNPower acquisition from Ayala, we would need to raise funding for that. That’s about $579 million.”

He noted though that, “we’ve lined it up already, we have a group of banks that will lend us that amount of money. We’re hoping to close it at the first quarter of 2019.”

“At this point what we’ve lined up is dollar, because the purchase price is dollars. But we’re going to hedge some of it. We’re trying to match it with the cash flows from the company as well. It’s a dollar borrowing, the question now is how much do we hedge to peso,” Lozano explained.

He added that both AEV and subsidiary Aboitiz Power Corporation are looking at the possible issuance of retial bonds to raise additional funds. While AEV has yet to do this, AboitizPower had done this in 2015 and still has 117 billion remaining from its shelf registered bonds.

“(For AEV) our plan is to do a shelf, get it already started next year, and then depending on our investments we can either do a bigger offering later in the year or in 2020,” said Lozano. (JAL)