Alsons in talks with potential investors

by Lenie Lectura – November 16, 2015

from Business Mirror

ALSONS Consolidated Resources Inc. (ACRI) of the Alcantara Group is in talks with potential investors, both foreign and local, in line with its plans to further cement its position in the lucrative power sector.

The company is mum on this, but a highly placed source identified two of the many potential investors that could be interested to join the company.

“The two possible interested investors are MGen [Meralco PowerGen Corp.] and Malakoff of Malaysia,” the source said.

MGen is the power-generation arm of the Manila Electric Co. (Meralco). It wants to build a portfolio of highly fuel-efficient, highly reliable power-generating facilities of up to 3,000 megawatts (MW) in joint venture with strategic partners.

The power projects of MGen in the pipeline include the 455-MW plant of San Buenaventura Power Ltd. in Quezon province, 600 MW by Redondo Peninsula Energy Inc. in Subic, and 1,200-MW Atimonan One Energy also in Quezon. These are all coal-fired power plants. Meralco officials did not comment when asked about its interest to invest or partner with the Alcantara group.

Malakoff is the leading power producer in Malaysia, with an effective capacity of 5,346 MW comprising of six power plants that run on oil, coal and gas. On the international front, as an independent water and power producer, it owns a net capacity of approximately 690 MW of power production and 358,850 cubic meter per day of water desalination. Its overseas projects are in Bahrain, Saudi Arabia, Algeria, Australia and Oman.

The source did not identify the other potential investors. A Bloomberg report last week stated that company chief financial officer Luis Ymson said there are four groups seeking to acquire a stake in the company. It is also possible, added Ymson, that direct stakes in the company’s power plants may also be sold if preferred by investors.

ACRI is developing two coal-fired power facilities to help provide a stable source of baseload power for Mindanao and ensure long-term power security for the island. These are the 105-MW San Ramon Power Inc. plant in Zamboanga City and the 210-MW Sarangani Energy Corp. plant in Maasim, Sarangani.

The first 105-MW section of the SEC plan is now in the advanced stages of testing and commissioning, and will begin commercial operations in the first quarter of 2016 with an initial capacity of 105 MW.

The SEC plant is expected to be fully operational at full 210-MW capacity in 2018.

The SRPI power facility in Zamboanga City is scheduled to begin construction in 2016 and operational by 2019.

The company also owns three diesel-fired power plants that have significantly contributed to alleviating the power shortage in Mindanao. These are the 103-MW Mapalad Power in Iligan City, 100-MW Western Mindanao Power in Zamboanga City, and the 55-MW Southern Philippines Power in Alabel, Sarangani Province.

ACRI is likewise entering the renewable-energy sphere with the development of a 15-MW run-of-river hydroelectric plant along the Siguil River in Maasim, Sarangani.

The Siguil plant is set to begin construction in 2016.

ACRI-affiliated power facilities are expected to have a total generating capacity of 588 MW by 2019. This capacity will fulfill more than 25 percent of Mindanao’s projected peak demand for that year.

The Alcantara Group, through its other subsidiaries aside from ACRI, is also engaged in aquaculture and agribusiness, property development and services. It has been an active player in the economic development of Mindanao and the rest of the Philippines for over 50 years.

In October, ACRI said it continues to look for equity and debt raising options for its expansion plans.

Last week, ACRI said it would sell as much as P7.5 billion in bond. It is working with ING Bank NV to raise the amount for the company.

Alsons Vice President for Business Development Joseph Nocos said earlier that the company intends to provide a sustainable solution to Mindanao’s five-year-old power shortage.

“We are diversifying. The business is evolving. We need to establish our position in the market and we are doing that by developing power supply solutions to our customers from base load to peaking to ancillary.

“We have coal. We have diesel and hydro. So, in that sense, we can come close to mimicking NPC (National Power Corporation) before. In order for us to be a viable supplier of electricity in Mindanao, we need to have that kind of diversity. To me, that transition is existing,” he said.

He said all of the company’s power projects have off-takers to ensure the viability of the project as well as the interest of its shareholders. “We will no build power plants without off-takers. That’s the way to do business,” added Nocos.