Mitsubishi buys into PHL wind farm with Ayala deal

Business World Online
Posted on September 03, 2015 09:30:00 PM

JAPAN’S Mitsubishi Corp. bought into the operator of an 81-megawatt wind farm in Ilocos Norte following the divestment of a subsidiary of its partner Ayala Corp.

The buyer was Mitsubishi subsidiary DGA NLREC B.V., while the seller was Ayala unit Ayala International Holdings, Ltd.

The subject of the deal was Luzon Wind Energy Holdings B.V., which “owns part of Ayala’s stake in North Luzon Renewable Energy Corp. (NLREC), being held by its wholly-owned subsidiary AC Energy Holdings, Inc.,” according to a disclosure Ayala Corp. filed with the stock exchange.

NLREC owns the wind farm in Barangay Caparispisan in the coastal resort town of Pagudpud in Ilocos Norte.

“After the sale of Luzon Wind, AC Energy... still remains the largest owner of NLREC with an economic stake of approximately 36%,” read the disclosure.

The move would give the listed conglomerate fresh capital for future investments, a company official said.

“The sale allows AC Energy to recycle capital for future investments and at the same time realize value,” said Ayala Managing Director John Eric T. Francia.

“It also allows us to further strengthen NLREC shareholder group with the entry of Mitsubishi, which has been a long-term partner of Ayala,” Mr. Francia, who also sits as president of AC Energy, added.

Ayala and Mitsubishi have been partners since 1974 when they signed an agreement to jointly explore investment opportunities in the Philippines, according to the regulatory filing.

Mr. Francia declined to disclose the value of the transaction.

Besides AC Energy and now the Mitsubishi group, the other shareholders in NLREC are Philippine Investment Alliance for Infrastructure Fund (PINAI); and UPC Philippines Wind Holdco I.B.V.

The ownership structure of NLREC, Mr. Francia said, “involves different classes of shares so it’s difficult to specify.”

AC Energy -- through Northwind Power Development Corp. -- also owns and operates the country’s first wind farm -- the 33-MW Bangui project in Ilocos Norte. The project has since been expanded by 19 MW.

The Ayala-led power firm allotted an equity investment of around $500 million to develop various power generating projects.

Its portfolio will soon include a 270-MW coal plant in Calaca, Batangas -- a project done in partnership with Phinma Group’s Trans-Asia
Oil and Energy Development Corp.

The first 135-MW unit of the project already started commercial operations earlier this year, while the second is expected to go on stream within this year.

Besides those projects, AC Energy also has a minority interest in GNPower Mariveles Coal Plant Ltd., the owner of the existing 600-MW Mariveles coal plant in Bataan.

The project owner has plans to undertake a 1,200-MW expansion of the existing facility by 2018.

AC Energy and GNPower are also building another coal plant, involving a 552-MW facility in Kauswagan, Lanao del Norte.

Besides power, Ayala has interests in other key industries like real estate (Ayala Land, Inc.), banking (Bank of the Philippine Islands); water distribution (Manila Water Company, Inc.); and telecommunications (Globe Telecom, Inc.). -- Claire-Ann Marie C. Feliciano source