Aboitiz Equity to raise P1.5B via preferred shares issue

Aboitiz Equity Ventures Inc. (AEV), the listed investment holding firm of the Aboitiz family, plans to raise some P1.5 billion through the issuance of five to seven-year redeemable preferred shares.

In a disclosure to the Philippine Stock Exchange, AEV said it has tapped BPI Capital Corp. as issue manager for the issuance of 150 million preferred shares at P10 per share.

Other underwriters for the offering include PCI Capital Corp. (co-lead underwriter), First Metro Investment Corporation, BDO Capital & Investment Corp. Multinational Investment Bancorp., Citicorp Capital PhilippinesInc. and Union Bank of the Philippines.

AEV said proceeds from the offering will be used to refinance the outstanding preferred shares of the company and fund various power projects as well as capital requirements of its subsidiaries and affiliates.

AEV earlier sold 43.7 million of its treasury shares to fund greenfield power projects and bid for the power plants of the state-owned National Power Corp.

For this year, AEV has allotted P1 billion for new investments in power generation.

AEV, through Aboitiz Power Corp., is bidding for the 360-megawatt Magat hydroelectric power plant in Ramon, Isabela and the hydroelectric power complex consisting of the 100 megawatt Pantabangan Hydroelectric power Plant and the 12-MW Masiway hydroelectric power plant both located in Pantabangan, Nueva Ecija.

The group is also eyeing to operate a 200-MW coal power plant to supply the requirements of the Visayan Electric Co.

The Aboitiz Group, through its wholly owned subsidiary Hedcor Inc., is the pioneer and industry leader in the development, operation and management of hydropower plants.

Hedcor Inc. is the largest developer of mini-hydropower in the Philippines, operating 19 generating facilities in Benguet and Davao with 113 MW of total installed capacity.

AEV earlier secured a P2.2-billion loan facility from a group of banks led by Bank of the Philippine Islands.

AEV needs between P5 billion and P6 billion for the construction of three new plants over the next two or three years. The plants located in the Visayas-Mindanao area are estimated to cost between $300 million and $500 million.

Among these new plants include a 200 mw coal-fired plant in Cebu and two hydropower plants in Davao. The two new plants to be set up in Davao will have a combined capacity of 76 mw. Construction of the first plant is expected to be completed by 2008 in anticipation of a power shortage in the Visayas and Mindanao.