Aboitiz Power Corp. is cornering a significant stake in the local subsidiary of German company STEAG GmbH, which runs a coal-fired power plant in Mindanao.
AboitizPower, the holding firm for the Aboitiz’s investments in power generation, announced in a disclosure the acquisition of an additional 35.4-percent stake in STEAG State Power Inc. (SPI).
Valued at $36.1 million (about P2.1 billion), “plus locked box interest at a simple rate of 4 percent per annum,” the deal involves the purchase of 167,648,480 shares from the German power firm.
After the necessary corporate and regulatory approvals are obtained, AboitizPower will increase its stake in SPI to 69.4 percent.
STEAG’s share will decrease to 15.6 percent, while agribusiness, livestock and food company La Filipina Uy Gongco Corp. will continue to hold the remaining 15 percent.
AboitizPower received from STEAG a transfer notice for the sale of the SPI shares early this year. As partner, it exercised its right to have the first crack at acquiring the subject shares.
Listed SPC Power Corp. previously sought to buy STEAG’s 51-percent stake in SPI. The parties, however, decided to mutually terminate the accord first announced in February as conditions set were not fulfilled.
Incorporated in 1995, SPI owns and operates the 210-megawatt coal-fired power plant, including the transmission line and related facilities, situated at the Phividec Industrial Estate in Misamis Oriental.
Renewables expansion
“The acquisition will result in the expansion of attributable net income without adding new coal capacity to the grid,” said AboitizPower, which earlier promised to expand its renewable energy portfolio.
The Mindanao coal plant would help provide for the much-needed capacity in the Luzon grid, which has experienced tightness of supply reserves in recent years, according to AboitizPower.
“This is a good opportunity to help sustainably manage an existing generation facility, which is a vital component of the Mindanao grid and [to provide] affordable and reliable power to many Filipinos. Since this is an existing generation facility, there are no emissions added to the total GHG (greenhouse gas) emissions of the Philippines,” it said.
AboitizPower is targeting to significantly expand its green energy portfolio by building an additional 3,700 MW of renewable energy, resulting in a 50:50 balance between its renewable and thermal capacities by 2030.