Aboitiz Equity to sell over P5-B treasury shares to raise funds

Aboitiz Equity Ventures Inc. (AEV), the listed investment holding company of the Aboitiz family, said yesterday it is selling up to 743 million of its treasury shares to local and foreign investors. The company is hoping to raise over P5 billion from the sale.

In a disclosure to the Philippine Stock Exchange, AEV said it has started a five-day book-building program for its shares yesterday. The shares will be priced on Jan. 29.

AEV said the company has agreed with the placement agents to a lock-up undertaking, prohibiting the sale of AEV shares for a period of three months from the date of completion of the placement.

Most of AEV’s major shareholders have agreed to the terms of a similar lock-up preventing them from selling their shares.

AEV said the sale is in line with the group’s fund-raising activities for various power sector acquisitions. The group, through Aboitiz Power Corp., is also set to go public this year, hopefully in the first quarter of the year to raise additional cash.

The group needs $270 million to finance the purchase of the 360-megawatt Magat hydroelectric power plant in Ramona, Isabela. AEVI, together with partner SN Power, the second largest hydropower producer in Europe, won the bidding for Magat – the country’s largest hydropower plant – in December last year with a bid of $530 million.

It is also joining the auction to supply power in Sibulan and Tamugan, both in Davao, which would require the construction of a combined 72 megawatt hydroplant — Sibulan (42 megawatts) and Tamugan (30 megawatts). About P8 billion to P9 billion will be needed for these two projects.

Bidding for the Sibulan plant will take place in the first week of February this year. Assuming it wins, the AEV group plans to start construction of the plant within the first half of the year.

The group is also interested in bidding for the Ambuklao plant in Benguet which has been slated for auction by the government sometime this year.

Aside from this, the group is also eyeing the Masinloc power plant

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 megawatts of total installed capacity.