Homeward Ayala building 1,740-MW plants

Manila Standard Today
By Jenniffer B. Austria | Apr. 12, 2014 at 12:01am

Conglomerate Ayala Corp. is investing at least $400 million to start the construction of two coal-fired power plants with a combined capacity of 1,740 megawatts, a company executive said Friday.

Ayala Corp. managing director Eric Francia said the conglomerate’s energy arm AC Energy Holdings Inc. planned to put up a 135-MW coal-fired power plant in Lanao del Norte province.

AC Energy would spend between $200 million and $300 million for the Mindanao coal power project, Francia said in an interview at the sidelines of the annual stockholders’ meeting of Ayala Corp. The company will team up again with GN Power, its partner in the recently completed 600-MW Mariveles power plant.

AC Energy is building another 1,200-MW coal-fired power plant, consisting of two units with a capacity of 600 MW each, in Mariveles, Bataan, he said.

The company said the Mariveles plant would be separate from the 600-MW coal-fired power plant in Mariveles, which started commercial operations in the first quarter this year.

The company acquired a 50-percent interest in the expansion of the Mariveles power plant and is investing more than $300 million in the project, he said.

Ayala Corp. will sell $300 million of bonds which can be exchanged for shares in unit Ayala Land Inc. to raise funds for power and infrastructure investments.

Ayala unit AYC Finance Ltd. set an annual interest rate of 0.5 percent on the May 2019 bonds, which can be exchanged for Ayala Land shares at a 20-percent premium over the stock’s April 10 closing price, Ayala said in a stock exchange filing.

This is “a way to get more value out of your shares,” chief financial officer Delfin Gonzalez said at a briefing in Manila. The Ayala Land shares available for exchange will come from the parent company’s stake, which will drop to 46.5 percent from 49 percent if all the bonds are exchanged, he said.

The 180-year-old company is accelerating spending on power plants and infrastructure, helping to boost profit from its core businesses of property, banking, telecommunications and water, Ayala Corp. chairman Jaime Augusto Zobel de Ayala said.

The company is on track to increase profit to at least P20 billion ($451 million) by 2016, Zobel de Ayala said, after earnings rose 22 percent to P12.8 billion last year. source