MVP gains foothold in Mindanao’s power sector
The group of businessman Manuel V. Pangilinan has gained a foothold in Mindanao’s power sector with a deal to acquire a 50 percent stake in Alcantara family’s coal power generation holding firm Alsons Thermal Energy Corp. (ATEC) for an estimated price of P4.25 billion.
The acquisition will be made through Metro Pacific Investments Corp.’s associate firm Global Business Power Corp. (GBP), the leading power producer in the Visayas.
“The new partnership with Alsons presents a significant milestone for us, through GBP, to enter the fast growing and dynamic Mindanao market given Alsons’ proven, long standing and successful track record in owning and operating power plants in Mindanao. This strategic acquisition is in line with MPIC’s commitment to further bolster our infrastructure investments in all parts of the Philippines,” Pangilinan, who is MPIC and GBP chair, said in a disclosure to the Philippine Stock Exchange on Monday.
Alsons Consolidated Resources Inc. (ACR) chair and president Tomas Alcantara said: “We look forward to a fruitful partnership that combines GBP’s technical competencies and strengths in the Visayas with ACR’s long years of experience in Mindanao as the island’s first independent power producer. We believe that this partnership will greatly benefit power consumers particularly in light of the planned interconnection of the Mindanao and Visayas grids which we strongly support.”
ATEC is the holding company for ACR’s baseload coal-fired power plant assets. It owns a 75 percent stake in the 210-megawatt (MW) Sarangani Energy Corp. (SEC)’s baseload coal-fired plant in Maasim, Sarangani Province. ACR’s long-time Japanese partner Toyota Tsusho Corp. will still hold 25 percent equity in SEC.
SEC plant’s first 105 MW section began operating in April 2016. SEC’s second 105 MW section is currently undergoing construction and is slated to begin operating in 2019. When SEC reaches its full 210 MW capacity in the first half of 2019, it will service over six million people in key population centers of Mindanao such as General Santos, Cagayan de Oro, Iligan, and Butuan.
ATEC will also assume ACR’s stake in San Ramon Power Inc. (SRPI) which is developing a 105- MW baseload coal-fired plant in Zamboanga City which is scheduled to commence commercial operations in 2021.
ACR likewise operates three diesel plants in different parts of Mindanao to provide peaking and backup power. It is also entering the renewable sphere with its first 15 MW run of river hydro plant in Sarangani scheduled to begin construction this year.
For his part, GBP president Jaime Azurin said: “GBP was established out of the need for adequate, reliable and cost efficient power supply in the Visayas. Now that the region’s baseload power requirements have been secured, we are delighted to have another opportunity to be of service to emerging markets like Mindanao and help drive the nation forward through our new partners.”
The purchase price of P4.25 billion is still subject to adjustment on closing. The completion of the transaction is likewise subject to the satisfaction of certain conditions precedent, including the approval of the Philippine Competition Commission.
GBP intends to fund the acquisition through internal sources and external bank debt.
ING Bank N.V. acted as ACR’s sole financial adviser for the transaction while the law firm of Castillo Laman Tan Pantaleon & San Jose served as ACR’s legal adviser. Macquarie Capital acted as sole financial adviser while Puyat Jacinto & Santos Law acted as the legal adviser to GBP.
GBP is the leading power supplier in the Visayas with an aggregate capacity of 854 MW of coal- and diesel-powered generating facilities.
Going beyond the Visayas region, the company has gained presence in Luzon as it undertakes the development of a 670-MW “super critical” coal-fired plant in Luna, La Union.
GBP is 56-percent owned by Beacon Electric Asset Holdings Inc. (BEAHI) through Beacon PowerGen Holdings Inc. BEAHI is a joint venture between MPIC and PLDT Communications and Energy Ventures Inc. (PCEV), with MPIC holding a 50 percent voting interest in BEAHI.
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