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Aboitiz takes out $300-M loan for stake in Ayala thermal unit

Updated: Jun 15

Aboitiz Power Corporation (AboitizPower) has signed a US$300-million loan agreement with four banks to partially finance the acquisition of a minority stake in Ayala’s thermal platform.

In a regulatory filing on Wednesday, April 10, AboitizPower said it signed a facility agreement with DBS Bank Ltd., Mizuho Bank, Ltd., MUFG Bank, Ltd., and Standard Chartered Bank.

AboitizPower is acquiring 49% voting stake and 60% economic stake in AA Thermal, Inc., the thermal power company of Ayala-led AC Energy, Inc. for US$579.2 million.

The transaction was cleared by the Philippine Competition Commission (PCC) earlier.

In its review, PCC found that the transaction “will not likely result in substantial lessening of competition in the identified relevant markets for power generation and retail electricity supply in Luzon and Visayas.”

The transaction will result in an increase of indirectly-held limited partnership interests of AboitizPower in GNPower Mariveles Coal Plant (GMPC) and GNPower Dinginin Ltd. Co. (GNPD), both located in Bataan province.

“Aboitiz Power will acquire only a minority stake in AA Thermal. There is no change of control in the operating companies, GMPC and GNPD., which would give AboitizPower any increased ability or incentive to influence the actions of the said two plants,” the commission said.

PCC also noted that “there is no increased ability for the parties to engage in foreclosure after the transaction and that there are sufficient number of other power generation and retail electricity suppliers that pose competitive constraint even after the Aboitiz Power-AA Thermal transaction.”

AboitizPower, through subsidiary Therma Power, Inc. has existing interests in the two power plants.

The Mariveles coal plant consists of two 316-megawatt (ME) generating units that have been operating since 2014. The Dinginin plant, which initially consists of a 668-MW supercritical coal-fired plant, is scheduled for completion this year.

AboitizPower, the power business unit of Aboitiz Equity Ventures, Inc., was trading at P36.20 per share as of 9:45 a.m. on April 10, 2019. It closed at P35.50 apiece on April 8, 2019. (Ventures Cebu)

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