Wednesday, December 21, 2016

Marubeni acquires 20% stake in operator of Calaca power plant

Posted on December 21, 2016

JAPAN’S Marubeni Corp. has acquired a 20% stake in South Luzon Thermal Energy Corp. (SLTEC), the joint venture company that operates a coal-fired power plant in Calaca, Batangas, the Japanese company said in a statement published on its Web site on Tuesday.
In separate statements, AC Energy, a subsidiary of Ayala Corp., and Phinma Energy Corp. said they sold part of their shareholdings in SLTEC to Marubeni unit Axia Power Holdings Philippines Corp.

AC Energy disclosed to the stock exchange that it had signed “definitive documents” to sell a 15% stake in SLTEC to Axia Power, while Phinma Energy said it sold 5% of its stake in SLTEC.

SLTEC is the joint venture between AC Energy Holdings, Inc. and Trans-Asia Oil and Energy Development Corp., the former name of Phinma Energy.

“We are delighted to have a new partner in SLTEC. Marubeni group has extensive experience in thermal power and this should further strengthen our joint venture,” said John Eric T. Francia, AC Energy president and chief executive, in a statement.

“The partial sale also allows AC Energy to reinvest more aggressively in new projects as we pursue our 2020 goal of reaching 2,000 MW,” he added.

Before the deal, the Ayalas held a 50% stake in SLTEC, which started the commercial run of the first of the two-unit 270-megawatt (MW) circulating fluidized bed in April 2015. The second unit was completed in February 2016. SLTEC operates as a baseload plant that is meant to meet the power requirements of Luzon.

Francisco L. Viray, Phinma Energy president and chief executive, was quoted as saying: “The Marubeni group investment in SLTEC conveys strong validation of confidence in SLTEC’s management team, as well as in the future prospects for reliable and efficient plant operations.”

Phinma Energy will continue to offer SLTEC’s full output, in line with the company’s growth aspirations as a licensed retail electricity supplier (RES), Mr. Viray added.

After the deal, SLTEC will now be 20%-owned by the Japanese firm, 45% by Phinma Energy and 35% by AC Energy.

The parties involved in the deal did not place a figure for the 20% stake bought by the Marubeni unit, but Phinma Energy said in its disclosure that the 5% stake it sold translates to 3,583,026 shares at P234.93 each for a total of P841,770,555.26. At the same price per share, the total 20% stake could be valued at P3.4 billion.

“The transaction will bring in additional cash to the issuer while it retains significant shareholdings in [SLTEC],” said Phinma Energy, which will become the single largest shareholder of the power plant operator.

Phinma will continue to have full control of the output of SLTEC, it added.

“With Axia Power, SLTEC becomes more technically and financially capable to undertake larger projects in the near future,” it said.

Marubeni said the deal offers an opportunity, together with Phinma Energy and AC Energy, to jointly explore new power projects in the future.

“In the Philippines, Marubeni has participated in several power generation assets, which are almost equivalent to 20% of the country’s total installed capacity. Marubeni, utilizing its extensive experience and knowledge gained in projects around the world, will contribute to development in the Philippines through the provision of a stable power supply,” the Japanese firm said.

On Tuesday, shares in Phinma Energy surged 5.83% to P2.18 each, while those of Ayala Corp. slipped by 1.72% to P715 apiece. -- Victor V. Saulon

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