Ayala buys stake in power firm

Philippine Daily Inquirer

10:47 pm Friday, January 31, 2014

Conglomerate Ayala Corp. has completed the acquisition of a 17.1-percent stake in GNPower Mariveles Coal Plant Ltd. Co. (GMPC), owner of the 600-megawatt coal-fired plant in Mariveles, Bataan.

The plant has completed commissioning and started commercial operations earlier this week, Ayala disclosed to the Philippine Stock Exchange (PSE).

It was earlier reported that Ayala had bought into this power plant project for $155 million.

Ayala, through a wholly owned subsidiary, has achieved financial closing in relation to the acquisition, the disclosure said. This was under the terms of the sale and purchase agreement that the group earlier entered into with an affiliate of a fund advised by Denham Capital.

With the acquisition, the Ayala conglomerate is now a co-owner of the Mariveles power plant with power project developer Power Partners Ltd. Co. and Sithe Global Power LLC, a company owned by investors of The Blackstone Group.

The Mariveles power plant is a major capacity addition seen critical to alleviating potential power shortages in the Luzon grid. The plant uses pulverized coal technology designed to meet global standards, in line with Ayala’s goal of becoming a key player in the power business.

J.P. Morgan served as financial adviser to Ayala in the transaction. Doris C. Dumlao  source

Visayas power company raises P3 billion through debt sale

Business World Online

Posted on January 30, 2014 11:05:37 PM

VIVANT Corp. has raised approximately P3 billion from corporate notes, mainly for general corporate purposes, the Cebu-based power producer and distributor said in a disclosure yesterday.

  Vivant reported that it “signed an agreement to issue P3 billion in fixed-rate corporate notes… on Jan. 29.”

The offering, it noted, was fully subscribed by a consortium of local banks identified as: China Banking Corp., Development Bank of the Philippines, Metropolitan Bank and Trust Co., Philippine Savings Bank, Rizal Commercial Banking Corp. and Robinsons Bank Corp.

The deal was arranged by First Metro Investment Corp.

The notes will be issued on Feb. 3, according to the disclosure.

“Net proceeds of the issue, which will be in two tranches, will be used for general corporate purposes, including but not limited to capital expenditures for existing assets and investments in power generation projects,” the company said.

Vivant saw its profit drop 35.59% to P1.14 billion as of September last year from P1.77 billion in the same nine months in 2012.

In the same comparative periods, revenues went down by 23% to P2.21 billion from P2.87 billion; generation cost decreased by 18.35% to P800.68 million from P980.67 million, while expenses more than doubled to P219.59 million from P104.13 million.

Vivant is engaged in energy distribution and generation services. It operates Visayan Electric Company, Inc., which provides electricity in the Metro Cebu and five other municipalities in the province. The company is also involved in the acquisition of power plant facilities, energy development ventures and marketing of electricity.

Vivant, through Calamian Islands Power Corp. is building a 750-kilowatt diesel-fired power plant in Busuanga and an eight-megawatt (MW) bunker-fired power plant in Coron -- both in the province of Palawan. The plants are expected to be operational this year.

Through Vivant-Malogo Hydropower Corp., the company is building a 6-MW hydroelectric plant in Silay City, Negros Occidental that will be operational by the last quarter of next year.

Vivant shares closed at P10.50 apiece yesterday, down 80 centavos or 7.08% from P11.30 each on Wednesday last week. -- Claire-Ann Marie C. Feliciano   source

Salceda wants Aleco privatized

Business Mirror

30 Jan 2014 

 

Written by Manly M. Ugalde / Correspondent

LEGAZPI CITY—Despite the ongoing problems besieging the Albay Electric Cooperative (Aleco), including a monthlong strike by its regular employees, Gov. Joey Sarte Salceda is asking critics to give San Miguel Corp. (SMC), the cooperative’s new owner, the opportunity to manage Aleco.

Salceda expressed his belief that the electric-power cooperative would be revived by the management team of SMC.  The cooperative provides the electric-power needs of more than 200,000 consumers.

Protesters have prevented SMC from taking over Aleco early this month by “physically” taking its control through its own interim board of directors reportedly sanctioned by a consumers’ assembly.

SMC representatives began their takeover operation last December with the formal management change supposed to have taken place on January 7.

Officials of the Aleco Labor Employees Organization (Aleo) and the Aleco Multisectoral Stakeholders Organization (Amsso) had earlier declared the SMC contract for the initial 25 years to manage Aleco as concessioner as “null and void,” saying it did not have the  approval from member-consumers.

As this developed, consumers said their monthly bills have not been delivered for five months now since Aleco employees went on strike. They were protesting what they called the manipulation by the National Electrification Administration to privatize Aleco and had its management awarded to SMC.

SMC was the lone bidder that won the Aleco concessioner contract after four other giant firms who joined the prequalification bidding withdrew during the prebid conference.

Salceda said he has no doubt Aleco’s service would greatly improve under SMC management. 

Amsso and Aleo officials, however, said striking regular employees had returned to work on the second week of January in respect of the return-to-work order from the Department of Labor.

 Ephraim de Vera, an Aleo official, admitted that the physical takeover of the member-consumers interim board of directors nominated to manage Aleco was also temporarily disabled pending its regular takeover as required. Documents are being prepared and finalized by lawyers.

 De Vera admitted the nondelivery of Aleco monthly billings to consumers, saying even Aleco’s meter readers hired by SMC could not perform their duties because of a legal conflict after the hiring of a collection agency was also questioned by Aleo and Amsso.

Generoso Butial said fellow consumers could not pay their electric consumption minus their bills and designated collection centers. He said he had requested Aleco since last year for the transfer of his electric connection to his nearby new residence but was told by an Aleco employee that no one would attend his request.

SMC allocated some P350 million for employees who would retire and those who opt for separation.   source

Aboitiz hikes capex budget to P88 B

By Neil Jerome C. Morales (The Philippine Star) | Updated January 30, 2014 - 12:00am

MANILA, Philippines - Cebu-based conglomerate Aboitiz Equity Ventures Inc. (AEV) is substantially increasing its capital expenditures to P88 billion this year to bankroll power generation projects.

Expansion programs are also slated this year for the banking, food and property subsidiaries, the company said in a statement.

The holding firm said it will spend P88 billion this year, up almost 50 percent from P59 billion in 2013.

“The bulk of expenditures, amounting to P78 billion, will be implemented by the power business as it continues to explore and build new power plants in response to the country’s need for additional power generating capacity amidst the tightening supply-demand situation for energy,” AEV said.

Subsidiary Aboitiz Power Corp. and its partners are pursuing a five-year program to increase capacity by up to 2,098 megawatts (MW) by 2017.

The power generator is already putting up three run-of-river hydropower plants equivalent to more than 27 MW: the 14-MW Tudaya I and II plants in Mindanao that will be completed by the first half and the 13.2-MW Sabangan facility in Mt. Province that will be finished early in 2015.

“The 300-MW Davao baseload plant which broke ground in 2012 is also expected to be completed in 2015 to help address the power supply shortfall in Mindanao,” AEV said

AboitizPower will also begin the expansion of its Pagbilao baseload plant and construction of its Cebu baseload plant within this year.

In 2012, Japanese-owned TeaM Energy Philippines partnered with AEV to expand the 735-MW Pagbilao coal-fired power plant at a cost of up to $700 million.

“These two projects will increase capacity in the Luzon and Visayas grids by an additional 400 MW and 300 MW, respectively, by 2017,” AEV said.

Other subsidiaries of the listed conglomerate will also expand this year.

Union Bank of the Philippines will invest P680 million for technology-related expenditures and the expansion of its branch network, in line with initiatives to ensure customer satisfaction and maximize growth in both deposit and loan accounts.

Food subsidiary Pilmico Foods Corp. is spending P2.7 billion for the expansion of its feeds and farms operations through the construction of two feedmill plants and the third expansion of its breeder and growing-finishing farms.

Property arm Aboitiz Land Inc. allotted P4 billion to open new phases for its Priveya Hills, Pristina North and Almiya projects in Cebu.

“The developer is looking at launching at least three new residential projects within the year,” AEV said.

AboitizLand earlier entered into a joint venture deal with property giant Ayala Land Inc. for the development and operation of a 15-hectare city center in Subangdaku, Mandaue City in Metropolitan Cebu.

AEV’s fuel unit, Aseagas Corp., will start the construction of a $50-million liquid biomethane plant, which will produce transport fuel from organic waste.

The plant, which will be completed in 18 months, will have a capacity of around 9,000 metric tons of biomethane per year.

In the first nine months last year, AEV’s consolidated net income slipped eight percent to P16.6 billion from P18 billion amid the decline in selling prices of electricity and the revaluation of dollar-denominated liabilities.

Adjusting for non-recurring items, AEV’s core net income fell seven percent to P16.4 billion.   source

PSALM to rebid Leyte power plants’ output

Manila Standard Today
By Alena Mae S. Flores | Jan. 30, 2014 at 12:01am

Power Sector Assets and Liabilities Management Corp.  said Wednesday it will rebid the contract to manage the output of the Unified Leyte geothermal power plants, which were damaged by typhoon Yolanda in November last year.

PSALM president Emmanuel Ledesma Jr. said the board accepted the withdrawal by Unified Leyte Geothermal Energy Inc., the winning bidder of the power supply management contract, and decided to conduct another auction in September 2015.

ULGEI, a unit of Energy Development Corp., submitted a bid of P215 million to administer and manage Unified Leyte power plants’ bulk energy contract in November last year, before typhoon Yolanda hit the central parts of the country.

“The board approved the withdrawal of ULGEI as the winning bidder of the bulk. We have a pending OGCC opinion regarding the forfeiture of the bid bond,” Ledesma said.

ULGEI announced last year it could not accept the government’s award as the highest bidder of the power contracts under the same conditions when it was privatized because the plants were damaged by typhoon Yolanda.   source

PSALM to rebid Leyte power plant contract

By Iris C. Gonzales (The Philippine Star) | Updated January 30, 2014 - 12:00am

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM), the government agency tasked to privatize state-owned power assets, will rebid the selection and appointment of the Unified Leyte independent power producer administrators (IPPAs) for bulk energy, its top official said.

PSALM president Emmanuel Ledesma Jr. said that the rebidding would be in September 2015.

But while PSALM said it would rebid the selection of IPPAs for Unified Leyte’s bulk energy, it already approved the award of IPPAs for the strips of energy but the issuance of certificate of effectivity will be moved by one year because of Super Typhoon Yolanda which affected the Unified Leyte plant.

This after the winning bidder, Unified Leyte Geothermal Energy Inc. (ULGEI) withdrew from the project.

“The board (of PSALM) approved the withdrawal of ULGEI as winning bidder for bulk energy,” Ledesma said.

ULGEI tendered a bid of P215 million for the Unified Leyte IPPA for bulk energy and met the reserve price set by the PSALM board but consequently withdrew from the project.

According to PSALM, an IPPA for the bulk energy will have the right to the capacity in excess of the 240-megawatt sum of strips.

The obligation to trade ULGPP’s total output (bulk and sum of strips, as well as the necessary registration applications required by the Wholesale Electricity Spot Market shall lie solely with the IPPA for the bulk energy, PSALM said.

Unified Leyte is composed of the 125-MW Upper Mahiao, 232.5-MW Malitbog, and 180-MW Mahanagdong power plants, and the 51-MW optimization plants. It is located in Tongonan, Leyte.   source

Aboitiz conglomerate to spend more

Business World Online

Posted on January 29, 2014 11:28:00 PM

By Claire-Ann M. C. Feliciano, Reporter

ABOITIZ Equity Ventures, Inc. (AEV) plans to spend more this year, mostly for its power business, the listed conglomerate said in a statement yesterday.

  The holding firm of the Aboitiz family said it has earmarked some P88 billion for capital expenditure (capex) of all its business units, higher than last year’s P59 billion.

AEV said bulk of investment -- amounting to P78 billion -- will be spent by its power unit as it continues to build new power plants intended to meet the increasing need for electricity by a growing economy.

“With this year’s capex budget, we reiterate our commitment to provide reliable and ample power supply at a reasonable cost and support the Philippines’ energy needs,” the statement quoted AEV President and Chief Executive Officer Erramon I. Aboitiz as saying.

Aboitiz Power Corp. (AboitizPower) -- the conglomerate’s power generation and distribution unit -- is implementing a five-year plan to increase total installed capacity to 2,098 megawatts (MW) by 2017, according to the statement.

AEV said AboitizPower is building three run-of-river hydro power plants with combined capacity of 28 MW. These plants consist of the 14-MW Tudaya I and II in Davao del Sur that slated to be completed this semester; as well as the 14-MW Sabangan plant in Mt. Province, expected to be finished in early next year.

Besides the hydro projects, AboitizPower is building a 300-MW coal-fired plant on a site straddling Davao City and Davao del Sur. The plant is scheduled to be operational in 2015.

“Additionally, the company aims to begin expansion of its Pagbilao base load plant (in Quezon province) and construction of its Cebu base load plant within 2014,” AEV said. “These two projects will increase capacity in the Luzon and Visayas grids by 400 MW and 300 MW, respectively, by 2017,” it added.

AEV’s banking unit, Union Bank of the Philippines, Inc. (UnionBank), will get a P680-million share of the capex.

The parent said this will be used “for technology-related expenditures and expansion of its branch network in line with initiatives to ensure customer satisfaction and maximize growth in both deposit and loan accounts.”

Pilmico Foods, Inc., the food subsidiary, will spend P2.7 billion for the expansion of its feeds and farm operations. The firm, according to AEV, will be building two new feed mills and will implement the third phase of breeder farm expansion.

Property unit Aboitiz Land, Inc. (AboitizLand), on the other hand, will be spending around P4 billion for new phases for its Priveya Hills, Pristina North, and Almiya projects.

“The developer is looking at launching at least three new residential projects within the year,” the firm said.

It noted that AboitizLand also entered into a joint venture agreement with Ayala Land, Inc. for the development and operation of a 15-hectare city center in Subangdaku, Mandaue City in Metropolitan Cebu to be launched in 2015.

Aseagas Corp. -- the company’s joint venture with UK-based Gazasia Ltd. -- will splend $50 million for its liquid biomethane plant in Batangas. The plant will produce transport fuel from organic waste produced by Absolut Distillers, Inc. “Once completed, the plant will have a capacity of around 9,000 metric tons of bio-methane per year. 

Construction is expected to be completed within 18 months,” AEV said.

The conglomerate, in November last year, raised P8 billion from a retail bond sale to be used for investments and other corporate purposes.

The seven-year bonds -- worth P6.2 billion and due 2020 -- have a fixed interest rate of 4.4125% per year, while the 10-year bonds -- worth P1.8 billion and due 2023 -- carry an interest rate of 4.6188% per year.

AEV’s net income fell 10.9% to P20.23 billion as of September last year from P22.7 billion in the same nine months in 2012.

Revenues slipped 2.98% to P58.98 billion from P60.79 billion, while costs and expenses declined by 4.98% to P41.58 billion from P43.76 billion.

Yesterday, shares of AEV gained 10 centavos or 0.19% to P52 apiece from P51.90 on Tuesday; while those of AboitizPower lost 10 centavos or 0.28% to P35.90 from P36.00; and those of UnionBank shed 90 centavos or 0.71% to P126 each from P126.90.   source

AEV allocates P88-billion capex for 2014

Business Mirror

29 Jan 2014 

 

Written by VG Cabuag

ABOITIZ Equity Ventures Inc. (AEV) on Wednesday said it is allocating P88 billion for the group’s capital expenditures (Capex) this year, the bulk of which will go to its power business as the company is set to complete its generation plants.

The company said that it will allot P78 billion for its power unit, P4 billion for its property unit to develop new residential projects and the rest for its banking and fuel units.

This year’s capex is higher by nearly half from P59 billion that it announced last year.

“With this year’s capex budget, we reiterate our commitment to provide reliable and ample power supply at a reasonable cost and support the Philippines’s energy needs,” AEV President and Chief Executive Officer Erramon Aboitiz said.

AboitizPower is implementing a five-year plan to increase capacity by up to 2,098 megawatts (MW) by 2017.

To date, the power unit is already constructing three run-of-river hydro plants equivalent to 28 MW. This consists of the 14-MW Tudaya I and II hydro plants in Mindanao which are expected to be completed by the first half of 2014 and the 13-MW Sabangan hydro plant in Luzon which will be finished by early 2015.

On the other hand, the 300-MW Davao base-load plant, which broke ground in 2012, is also expected to be completed in 2015 to help address the power supply shortfall in Mindanao.

It will also expand its Pagbilao base-load plant and construction of its Cebu base-load plant within 2014. “These two projects will increase capacity in the Luzon and Visayas grids in 2017b by an additional 400 MW and 300 MW, respectively, by 2017,” the company said.

AEV’s petroleum unit, Aseagas, will also break ground its P2.25-billion liquid bio-methane plant, which will produce transport fuel from organic waste.

Once completed, the plant will have a capacity of around 9,000 metric tons of bio-methane per year. Construction is expected to be completed within 18 months.

Property unit Aboitiz Land estimates that it will be spending roughly P4 billion this year as it opens new phases for its Priveya Hills, Pristina North and Almiya projects.

The company is looking at launching at least three new residential projects within the year.

It has also recently entered into a joint-venture agreement with Ayala Land for the development and operation of a 15-hectare city center in Subangdaku, Mandaue City in metropolitan Cebu. Its banking unit Union Bank of the Philippines will invest P680 million for technology-related infrastructure and expansion of its branch network to maximize growth in both deposit and loan accounts.

Food subsidiary Pilmico Foods Corp. is spending P2.7 billion for the expansion of its feeds and farms operations through the construction of two feed mill plants and the third expansion of its breeder and growing-finishing farms.   source

AEV capex for 2014 to hit P88 billion

Manila Times.net
January 29, 2014 9:27 pm

by Madelaine B. Miraflor Reporter

With huge amount needed for its power investments, the capital spending of the whole Aboitiz Group for this year could reach P88 billion.

A statement showed on Wednesday that conglomerate Aboitiz Equity Ventures (AEV) will be allocating as much as P88 billion for its capital expenditure (capex) this year.

According to the company, of the P88-billion capex, P78 billion will be used by the group’s power unit.

“[AboitizPower] continues to explore and build new power plants in response to the country’s need for additional power generating capacity amid the tightening supply-demand situation for energy,” AEV said.

Together with its partners, AboitizPower is implementing a five-year plan to build additional power capacity of up to 2,098 megawatts (MW) by 2017.

To date, the listed group’s power unit is constructing three run-of-river hydro plants with an equivalent output of 28 MW.

This consists of the 14-MW Tudaya I and II hydro plants in Mindanao which are expected to be completed by the first half of 2014, and the 13-MW Sabangan hydro plant in Luzon, which will be finished by early 2015.

The 300-MW Davao baseload plant, which broke ground in 2012, is also expected to be completed in 2015 to help address the power supply shortfall in Mindanao.

Moreover, AboitizPower is planning to start the expansion of its Pagbilao baseload plant as well as the construction of its Cebu baseload plant within 2014.

These two projects, as cited by the firm, will increase capacity in the Luzon and Visayas grids by an additional 400 MW and 300 MW, respectively, by 2017.

As for AEV’s other business unit, its banking arm UnionBank will get 680 million in capex which will be intended for its technology-related expenditures and the expansion of its branch network.

The holding firm’s food subsidiary, Pilmico, is also spending P2.7 billion for the expansion of its feeds and farms operations, through the construction of two feedmills plants, and the expansion of its reeder and growing-finishing farms.

Meanwhile, property unit AboitizLand estimated that it will be spending roughly P4 billion as it opens new phases for its Priveya ills, Pristina North, and Almiya projects. The developer is also looking at launching at least three new residential projects within the year.

AboitizLand recently entered into a joint venture agreement with Ayala Land Inc. for the development and operation of a 15-hectare city center in Subangdaku, Mandaue City in Metropolitan Cebu. AEV’s fuel unit, Aseagas, on the other hand, will break ground for its $50-million liquid biomethane plant, which will produce transport fuel from organic waste.

Once completed, the plant will have a capacity of around 9,000 metric tons of bio-methane per year. Construction is expected to be completed within 18 months. Aseagas will be another producer of clean energy for Aboitiz.

Dragged by the losses incurred by its power unit, the 2013 third quarter and nine-month consolidated net income of Aboitiz Group dipped by 25 percent to P4.6 billion and 8 percent to P16.6 billion, respectively.

Out of the total earnings contributions from the AEV’s strategic business units, power accounted for 80 percent, while the income contribution of its banking, food and real estate business units were at 12 percent, 7 percent and 1 percent, respectively.   source

NGCP says it was not at fault in failure to dispatch Malaya plant

By Iris C. Gonzales (The Philippine Star) | Updated January 29, 2014 - 12:00am

MANILA, Philippines - The National Grid Corp. of the Philippines (NGCP), the country’s power transmission operator, reiterated yesterday that it was not at fault when it did not dispatch the 650-megawatt Malaya thermal power plant in Rizal because there was enough supply.

It said that in compliance with electricity market rules, it dispatches only those generating plants that are included in the real-time dispatch (RTD) schedule, which is provided by market operator Philippine Electricity Market Corp. (PEMC).

PEMC operates the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

“During the maintenance shutdown of the Malampaya gas facility from Nov. 11 to Dec. 10, 2013, the RTD did not include Malaya the thermal power plant. Records show that supply during that period, as provided by WESM, was enough and that there was no system security issues that would trigger the call for must run units (MRUs),” NGCP said.

An MRU call means that the power plant will be put online to ensure that there is enough reserve to meet the security requirements of the grid.

 “In this case, given the market conditions, Malaya thermal power plant, with a design capacity of 650 MW, was neither included in the RTD nor assigned as an MRU for the period of Nov. 8 to Dec. 1, 2013,” NGCP said.

Instead, NGCP only requested PSALM to dispatch the Malaya facility from Dec. 2 to 10, when the required level of reserve fell short.

PSALM or the Power Sector Assets and Liabilities Management Corp., is the government corporation tasked to manage the government’s power assets including the Malaya plant.

“The system operator NGCP could not have called Malaya as an MRU on Nov. 8 to Dec. 1 since per technical considerations, there was no grid situation that would require NGCP to call Malaya for MRU,” it said.

NGCP made the reiteration after some sectors blamed it for failure to call on the Malaya facility during the one-month shutdown of the Malampaya natural gas facility.

Power generators have blamed the government for not dispatching the Malaya plant, saying that this would have augmented supply, which would have prevented electricity prices from skyrocketing.

During the Malampaya shutdown the generation charge – a huge component of electricity bills – of Manila Electric Co. (Meralco) rose by P3.44 per kilowatt-hour to P9.10 per kwh.

The Supreme Court has issued a 60-day temporary restraining order (TRO) on the record high rate increase.   source