AEV raises P6 billion from treasury shares

REPORT FROM BUSINESSWORLD Aboitiz Equity Ventures (AEV) had successfully raised P6.1 billion from the sale of its treasury shares, the company said Monday in a disclosure to the Philippine Stock Exchange. Proceeds of the fund-raising activity would be partly used to finance two hydroelectric power plants to be put up in Davao by 2010 as the company plans to engage in greenfield hydropower facilities in the island. "The proceeds of the sale will be used by AEV for various green-field power projects as well as for the participation in the privatization of the National Power Corp.’s power plants as they become available," AEV corporate secretary Jasmine S. Oporto said in the disclosure. Plants The two greenfield plants, which will have a combined capacity of 72-megawatts [MW], would cost around P8 billion to P9 billion, AEV Vice-President Erramon I. Aboitiz said. One plant, with a capacity of 42 MW will be put up in Sibulan in Davao by 2009 while a 30-MW facility will be put up also in the province by 2010. Aboitiz Equity noted that 92% of the offering was taken up by international investors, with the rest going to domestic buyers. "The offering saw a high-quality demand from approximately 60 institutional investors in the United States, Europe and Asia which will significantly increase the company’s free float and further strengthen AEV’s shareholder base," Ms. Oporto also said. The firm placed roughly 742.51 million treasury shares in the sale. "The price [per share of P8.20] represents a discount of 5.7% to the share price close of P8.70 on Jan. 26, 2007, the disclosure added. UBS Investment Bank was the sole book runner for the offer. ATR- Kim Eng acted as the domestic lead manager. Napocor assets The Aboitiz Group and its Norwegian partner, SN Power plan to acquire other Napocor plants that will be placed on the auction block this year. SN power and Aboitiz Power Corp. recently bagged the 360-MW Magat hydroelectric power plant in Isabela with a bid of $530 million. The consortium beat the $420.9-million bid by First Generation Northern Energy Corp. The Magat power plant was the second facility successfully bid out by PSALM last year. This followed the sale of the 112-MW Pantabangan-Masiway power complex auctioned off in September. The power complex, located in Nueva Ecija, has been turned over to its new owner First Generation Hydro Power Corp. — Iris Cecilia C. Gonzales/BusinessWorld