AboitizPower borrows $300 million from foreign banks to buy AC Energy’s thermal assets

By Lenie Lectura – April 11, 2019
from Business Mirror

ABOITIZ Power Corp. signed a $300-million loan facility with foreign banks to partly finance its acquisition of AC Energy Inc.’s thermal assets.

“AboitizPower signed a facility agreement with DBS Bank Ltd., Mizuho Bank Ltd., MUFG Bank Ltd., and Standard Chartered Bank to obtain an acquisition loan in the amount of up to $300 million. The proceeds of the loan will be used to partially finance the acquisition by AboitizPower of 49-percent voting stake and 60-percent economic stake in AA Thermal Inc.,” it said in a disclosure on Wednesday.

In September 2018, AboitizPower sealed a deal with AC Energy for the purchase of a stake in the latter’s thermal business,  AA Thermal Inc., valued at $579.2 million.

AA Thermal’s assets initially consisted of AC Energy’s limited partnership interests in GNPower Mariveles Coal Plant Co. Ltd., the owner and operator of an operating 2×316-megawatt coal plant in Mariveles, Bataan, and in GNPower Dinginin Ltd. Co., the developer and owner of a 2×668-MW supercritical coal plant project in Dinginin, Bataan.

AboitizPower and AC Energy are partners in the GNPower projects. The agreement will increase AboitizPower’s beneficial ownership in the Mariveles project to 78.325 percent, and in the Dinginin project to 70 percent.

The Mariveles project has been operating since 2013, while the first unit of the Dinginin project is scheduled to go online in 2019.

AboitizPower has set 4,000-MW target capacity by 2020.

The two GNPower plants will help the company meet this target. Also, these are essential in the company’s commitment to securing a balanced energy mix to support the country’s energy security.

“We had a target of 4,000 attributable MW to us by 2020 and, I think, we will probably hit that or maybe exceed it a little bit with the acquisition. So, we will come up with new target eventually. But we’re just focusing right now on our 2020 goals,” AboitizPower CEO Erramon Aboitiz said.

For AC Energy, the selldown of its thermal assets forms part of the company’s goal to achieve five gigawatts (GW) from a balanced mix of renewables and thermal assets by 2025.

“We’re close to 50-50. We’re in a nice position. This is our objective for 2025 to be at least 50 percent renewables, We are trimming down to achieve this balance. So, this selldown of AA Thermal to Aboitiz helps balance our portfolio and allow us to raise capital for our growth. We can maintain the balance we have now in 2018 all the way to 2025,” AC Energy President Eric Francia had said.