Power generator AES refinances $500 M in debt

MANILA, Philippines—AES Philippines, the local unit of US power giant AES Corp., has refinanced $500 million worth of  debt  in a bid to increase the company’s financial flexibility.

In a statement on Tuesday, AES Philippines said it closed the refinancing deal with a consortium of local banks, namely Bank of the Philippine Islands, Rizal Commercial Banking Corp., Philippine National Bank, and Security Bank.

“This long-term refinancing is another testament to the strong fundamentals of our business in the Philippines. It helped us to extend the average debt life, lower the interest expense and amend covenants to increase financial flexibility,” AES Philippines CEO Andy Horrocks said in the statement.

“With the potential expansion of our successful Masinloc facility, we see an opportunity to contribute to economic growth, whilst garnering better business prospects through mutually beneficial partnerships with trusted local banks. We are grateful for the support of the local banks who have shown their confidence in our business, which continues to benefit from overall economic and electricity demand growth in the country,” Horrocks added.

AES Philippines is currently the owner and operator of the rehabilitated 600-megawatt Masinloc coal-fed power facility in Zambales.

Through its acquisition of the Masinloc I facility from state-run National Power Corp. in 2008, AES became the largest foreign investor in the country’s power sector.

As a result of capital investment and operational improvements, AES has increased Masinloc’s capacity to 630 MW from 450 MW, improved availability to 74 percent from 50 percent, and increased net production by 62 percent within two years’ time.

AES announced years ago its intention to embark on a $1-billion expansion plan to double the existing capacity of the Masinloc facility. In 2011, Horrocks said that the company intended to push through with the  expansion, with a target of completing the first phase of 300 MW by 2015 and the second phase for another 300 MW by 2018.

AES is a Fortune 200 global power company with generation and distribution businesses in 27 countries. The company owns and manages $45 billion worth of assets. In 2011, its revenue reached $17 billion.