Business World Online
Posted on May 27, 2011 06:31:21 PM
THE ENERGY unit of Filinvest Development Corp. plans to spend as much as $1.8 billion to build a 1,650-megawatt portfolio of power generating assets in the long term, officials said on Friday.
Once fulfilled, the targeted capacity will allow energy operations to account for a third of the conglomerate’s business, the officials said.
"We will be putting up power plants in strategic locations in Luzon, Visayas and Mindanao, Jesus N. Alcordo, president of energy unit FDC Utilities, Inc., told reporters after the company’s stockholders meeting.
"And the company decided to use liquefied natural gas as the fuel because it is more efficient. It is a lot cleaner for the environment and it has much less carbon dioxide emission," Mr. Alcordo said.
To achieve this, the company is looking to spend $1-1.1 million per megawatt, he said.
Fuel supply deals should be firmed up by next month, Josephine Gotianun Yap, president and chief executive of Filinvest Development, told reporters.
The company is also preparing to join the bidding for the independent power producer administrator contract of the 149-MW Naga power complex, Mr. Alcordo said.
"We currently have discussions with both local and foreign banks for the project financing portion," Ms. Yap said.
"And then we will have both internally-generated [cash] and capital raising activities," she said.
Filinvest Development will also be selling more shares this year, but only to comply with the local bourse’s public float rule and not really to raise funds, Ms. Yap added.
Companies on the local bourse must have a public float of at least 10% by November.
To date, the company has a 7.7% public ownership.
Back in December, Filinvest Development announced it would enter the infrastructure and utility businesses.
The holding firm had said it was looking at building two 150-megawatt, coal-fired power plants in Luzon and the Visayas and a water desalination facility in the Visayas.
These plans come on the heels of the firm’s failed attempt back in 2007 to win the bidding for the government’s 60% stake in geothermal plant operator PNOC Energy Development Corp.
"You feel that the demand for power will be there. It is a steady income stream type of business," Ms. Yap said.
Once the target portfolio is realized, the power business is expected to play a major role in the conglomerate’s profitability, the officials said.
"Probably power will be a third to 40% [of the business]. So we expect three major legs: the financial, property and power [businesses]," Ms. Yap said.
Other businesses of the Gotianun-led conglomerate include East West Bank, Filinvest Land, Inc., Festival Supermall, Inc., Cyberzone Properties, Inc., and Filinvest Asia Corp.
Filinvest Development is also into sugar production through Pacific Sugar Holdings Corp., Davao Sugar Central Co., Inc., Cotabato Sugar Central Co., Inc., and High Yield Sugar Farms Corp.
Shares in the company, whose consolidated net income surged by 79% to P4.94 billion in the first quarter due to higher earnings from operating units, rose by 2.86% to P5.04 each on Friday. -- Neil Jerome C. Morales
"We will be putting up power plants in strategic locations in Luzon, Visayas and Mindanao, Jesus N. Alcordo, president of energy unit FDC Utilities, Inc., told reporters after the company’s stockholders meeting.
"And the company decided to use liquefied natural gas as the fuel because it is more efficient. It is a lot cleaner for the environment and it has much less carbon dioxide emission," Mr. Alcordo said.
To achieve this, the company is looking to spend $1-1.1 million per megawatt, he said.
Fuel supply deals should be firmed up by next month, Josephine Gotianun Yap, president and chief executive of Filinvest Development, told reporters.
The company is also preparing to join the bidding for the independent power producer administrator contract of the 149-MW Naga power complex, Mr. Alcordo said.
"We currently have discussions with both local and foreign banks for the project financing portion," Ms. Yap said.
"And then we will have both internally-generated [cash] and capital raising activities," she said.
Filinvest Development will also be selling more shares this year, but only to comply with the local bourse’s public float rule and not really to raise funds, Ms. Yap added.
Companies on the local bourse must have a public float of at least 10% by November.
To date, the company has a 7.7% public ownership.
Back in December, Filinvest Development announced it would enter the infrastructure and utility businesses.
The holding firm had said it was looking at building two 150-megawatt, coal-fired power plants in Luzon and the Visayas and a water desalination facility in the Visayas.
These plans come on the heels of the firm’s failed attempt back in 2007 to win the bidding for the government’s 60% stake in geothermal plant operator PNOC Energy Development Corp.
"You feel that the demand for power will be there. It is a steady income stream type of business," Ms. Yap said.
Once the target portfolio is realized, the power business is expected to play a major role in the conglomerate’s profitability, the officials said.
"Probably power will be a third to 40% [of the business]. So we expect three major legs: the financial, property and power [businesses]," Ms. Yap said.
Other businesses of the Gotianun-led conglomerate include East West Bank, Filinvest Land, Inc., Festival Supermall, Inc., Cyberzone Properties, Inc., and Filinvest Asia Corp.
Filinvest Development is also into sugar production through Pacific Sugar Holdings Corp., Davao Sugar Central Co., Inc., Cotabato Sugar Central Co., Inc., and High Yield Sugar Farms Corp.
Shares in the company, whose consolidated net income surged by 79% to P4.94 billion in the first quarter due to higher earnings from operating units, rose by 2.86% to P5.04 each on Friday. -- Neil Jerome C. Morales
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