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NEWS UPDATES 4 August 2009

Aboitiz Power to take over Philippine state-run power plants

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Aboitiz Power Corp. (AP) is set to acquire two of state-owned National Power Corp’s (Napocor) barge mounted diesel-powered generation plants, the Manila Times reported.

In a disclosure to the Philippine Stock Exchange, AP said that it had successfully concluded a negotiated bid with the Power Sector Assets and Liabilities Management Corp. (Psalm) for power barge (PB) 117 and PB 118.

Both power barges have a 100-megawatt capacity and were being sold for $16 million and $14 million, respectively.

The company will acquire PB 117—which is located in Barangay Santa Ana, Nasipit, Agusan del Norte—through its wholly owned subsidiary, Therma Mobile Inc. PB 118, which is located in Barangay San Roque, Maco, Davao del Norte, will be acquired by AP’s wholly owned subsidiary Therma Marine Inc.

The power firm said that it would pay at least 40 percent of the facilities’ acquisition cost while the balance will be financed “over a period not to exceed seven years.”

Closing of the transaction, however, is dependent upon the fulfillment of certain conditions entered into by AP and Psalm. This must be done within 270 days from the issuance of the letter of award by the government, ten days from today.

Upon turnover of the power barges, AP’s attributable generating capacity will increase to 1,240 megawatts.

Erramon Aboitiz, AP president and chief executive, earlier said that the power barges would help the company diversify its portfolio, which is currently dominated by renewable energy assets such as hydroelectric and geothermal power plants.

“We think that it is an asset that has its use. What we are trying to do is to accumulate a portfolio of assets that can handle baseload, intermediate and peaking,” he said.

AP is the power generation and distribution arm of the Aboitiz Group, a local conglomerate with interests in banking, energy, transportation and food. Psalm, on the other hand, is the government’s power sector privatization unit tasked with selling Napocor’s assets and using the proceeds thereof to pay off the latter’s debts.


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