Aboitiz Equity sets IPO for power unit

Aboitiz Equity Ventures Inc. (AEV), the listed investment holding company of the Aboitiz family, formally announced yesterday plans to offer shares of its wholly-owned subsidiary, Aboitiz Power Corp. (APC) to the public.

In a disclosure to the Philippine Stock Exchange, AEV said its board approved the planned initial public offering (IPO) of APC subject to the approval of the exchange, the Securities and Exchange Commission, Bureau of Internal Revenue and all other required regulatory authorities.

"The public offering is consistent with the spirit of the Electric Power Industry Reform Act (EPIRA) for broader public ownership of electricity distribution and generation assets. The offering will also enhance APC’s position as a participant in the privatization of Napocor (National Power Corp.) assets as well as in the development and acquisition of additional power projects," AEV said.

AEV said it was assured by the PSE that the chain listing rule would not be an obstacle to the proposed listing of APC.

In preparation for the proposed IPO, AEV will consolidate all its power generation and distribution assets into one company, APC, in exchange for shares. The move is seen to enhance shareholder value.

The transfer is subject to a fairness valuation by an independent party prior to SEC approval.

A company source said the group is hoping the IPO could take place within the first quarter of the year to ride on the resurgent stock market, fueled by strong investor interest resulting from the string of positive developments in the country’s economic front.

"We should strike while the iron is hot. Last year was a big year for us. So many good things happened to us. We acquired iBank (International Exchange Bank) and got some power plants, most recent of which is the Magat hydroelectric power plant. There’s no better time to launch an IPO but now when the market is on the upswing, the peso is strong, and the economy is improving," the same official said.

Another company official earlier said around 20 percent of APC will be sold to the public to raise capital for new greenfield projects and to bid for other generation assets to be sold by the government.

Under its proposal, APC will serve as the parent company of Hedcor Inc., Luzon Hydro Corp., Western Mindanao Power, Southern Philippines Power, Davao Light & Power, Cotabato Light & Power, Visayan Electric, San Fernando Electric, Subic Enerzone, and Aboitiz Energy Solutions. These corporations, including APC, had a combined net profit of P1.98 billion in the first three quarters of lasst year.

Of the total, P634 million was contributed by Davao Light, the third largest power distribution utility in the country. Luzon Hydro, a joint venture between the Aboitiz Group and Pacific Hydro Ltd. of Australia, chalked in a net income of P568.65 million followed by Visayan Electric with a net income P339.49 million.

Visayan Electric is the second largest power distribution utility serving Metro Cebu, the second largest city in the Philippines.

Hedcor, the pioneer in the development and operation of environment-friendly mini-hydropower plants (below 50 megawatts of electricity) in the Philippines, contributed P198.14 million, followed by Western Mindano Power Corp. with P75.77 million.

Western Mindanao is a joint venture among Aboitiz Power, Alsons Group and SingPower. It owns a 100-MW diesel power plant in Zamboanga.

San Fernando Electric posted a net profit of P36.62 million, Cotabato Light (P35.46 million), Southern Philippines (P31.7 million), Surbic Enerzone (P28.1 million), Aboitiz Energy Solutions (P22.67 million), and APC (P6.12 million).