Aboitiz Power to raise P8.4B from IPO

BY BERNARDETTE S. STO. DOMINGO, BusinessWorld Reporter Power firm Aboitiz Power Corp., a wholly owned subsidiary of listed Aboitiz Equity Ventures, Inc. (AEV), plans to raise about P8.4 billion from a planned initial public offering (IPO) this year. Proceeds of the IPO will be used to expand Aboitiz Power’s current generating capacity by acquiring state power assets, AEV said in a preliminary registration statement filed with the Securities and Exchange Commission (SEC). AEV is registering 7.2 billion common shares including 1.8 billion new common shares to be offered to the public. Aboitiz Power is set to file its application for listing of the shares with the Philippine Stock Exchange (PSE). AEV Senior Vice-President and Chief Financial Officer Juan Antonio E. Bernad on Tuesday said his company is interested to bid for four of the government’s power assets — the 600-megawatt (MW) Masinloc coal-fired power plant, the 175-MW Ambuklao/Binga hydroelectric power plant, the 193-MW Palinpinon and 113-MW Tongonan geothermal power plants. In January, AEV approved the consolidation of all of it’s power assets for transfer to Aboitiz Power in exchange for shares. The transfer is subject to a fairness valuation by an independent party and SEC approval. UBS was appointed financial advisor for the IPO. Aboitiz Power, which operates 19 hydroelectric power plants, has close to 600,000 customers with a total peak load of 640 megawatts. It owns Visayan Electric Co., the 2nd largest power distribution utility in the country. It recently acquired the 360-MW Magat hydroelectric power plant through a joint venture with SN Power of Norway. Besides Aboitiz Power, three power companies are also expected to go public this year with another energy firm expected to offer more shares as investors anticipate more robust activities in the power sector over the coming years. Energy advisory firm Merritt Partners Pte. Ltd. Chairman and Former Energy Secretary Vincent S. Perez said these companies — Enerfuse Holdings, Inc., San Carlos Bio-energy, Inc. (SCBI) and NorthWind Power Development Corp. — will likely take advantage of investment opportunities through an initial public offering. State-led Philippine National Oil Co. Energy Development Corp. is also expected to embark on a follow-on offering after its successful IPO in December last year. "These are possibilities, we don’t have the details yet," Mr. Perez told reporters Tuesday on the sidelines of a power forum at the PSE. The company also cited several opportunities for energy companies over the coming years such as strategic cross-border ventures, acquisitions and divestments, identification of international partners as well as privatization of government-owned energy assets. Enerfuse is the newly formed investment vehicle of small oil firms Eastern Petroleum Corp., Seaoil Philippines, Flying V and Unioil Philippines. SCBI is a joint venture between the National Development Corp. and Bronzeoak Philippines, Inc. NorthWind is a Danish power firm operating the largest wind park in Southeast Asia at Bangui Bay near the northern tip of Luzon. Its major shareholders include Moorland Phils., Phildane Resources Corp. and Fabmik Construction and Equipment Corp. Enerfuse is into biofuels production while SCBI produces bioethanol. Listed online stock brokerage company CitisecOnline.com, which sponsored the forum at the Philippine Stock Exchange, said opportunities abound for investors in the power sector this year. "[This year] will mark the start of the multi-year expansion phase for the power sector. In our view, all listed power companies are all well positioned to capitalize on the structural changes in the power sector," it said. It said the Power Sector Assets and Liabilities Management Corp., the agency tasked to sell the government’s power assets, is planning to bid out about 22 power plants, with a combined capacity of 5,580 MW, between 2007 and 2008.