Ayala energy firm inks deal to buy out foreign partners

By Myrna M. Velasco – November 5, 2019, 10:00 PM
from Manila Bulletin

The energy investment arm of the Ayala group has sealed agreements to buy out the shareholdings of foreign partners in its coal-fired power facility in Batangas; and its wind farm power venture in Ilocos Norte.

In a disclosure to the Philippine Stock Exchange (PSE), AC Energy, Inc. indicated that it will be exercising its “right to purchase the 20 percent ownership stake of Axia Power Holdings Philippines, Inc. in South Luzon Thermal Energy Corporation.”

Axia Power is a subsidiary of Japanese firm Marubeni Corporation which bought into the 270-megawatt SLTEC project in 2016, when it was still under the ownership of PHINMA Energy of the Del Rosario Group.

SLTEC is the corporate vehicle of the two unit coal-fired power plant (of 135-megawatt capacity each) that had been part of the Ayala group acquisition from PHINMA Energy.

AC Energy has emphasized that the buyout of Axia Power’s interest in SLTEC shall be “subject to satisfaction of certain conditions precedent,” including prospective approval of the Philippine Competition Commission.

In a parallel development, AC Energy also announced that it inked a share purchase agreement with Philippine Investment Alliance for Infrastructure (PINAI) for the acquisition of the latter’s 31 percent effective preferred equity ownership and 15 percent effective common equity ownership in the North Luzon Renewable Energy Corporation.

North Luzon Renewables is the corporate vehicle of the 81-megawatt Pagudpud wind farm power project in Ilocos Norte that had been included in the first wave of renewable energy ventures incentivized with feed-in-tariff.

PINAI is an investment fund comprising of Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., and Langoer Investments Holdings B.V. while the local partner is Government Service Insurance System.

Aside from AC Energy and PINAI, the other significant shareholders in the Pagudpud wind project are UPC Philippines HoldCo I B.V.; and Luzon Wind Energy Holdings B.V. which is an affiliate of Japanese firm Mitsubishi Corporation.