Aboitiz Power buys into East Asia Utilities and its subsidiary

Aboitiz Power Corp., the listed holding firm for all power-generation and distribution assets of the Aboitiz family, has acquired from El Paso Philippines Energy Corp. 50 percent of East Asia Utilities Corp. (EAUC) and 48 percent of EAUC’s wholly-owned subsidiary Cebu Private Power Corp. (CPPC) for about P307 million.

Part of the deal also involves the assumption of P878 million of intercompany debt owed to EAUC.

Based on the disclosure report filed with the Philippine Stock Exchange (PSE), Aboitiz Power will acquire 50 million common shares of EAUC and 3.6 million common shares of CPPC.

These assets were part of the Philippine electricity generation assets acquired by the Avenue Capital Group, the ultimate owner of EPPECI, from Globeleq Asia Holdings Limited after Globeleq bought out the generation assets of Texas-based El Paso Global Power in India, Indonesia and the Philippines.

EAUC operates a 50-megawatt thermal plant within the Mactan Export Processing Zone I (MEPZ I) in Mactan Island, Cebu. Since 1997, the EAUC power plant has been the sole provider of power to MEPZ I delivering reliable, high quality power to meet the stringent requirements of semiconductor firms, electronics manufacturers and other locators within the zone.

CPPC owns and operates a 70-megawatt thermal plant in Cebu City, one of the largest power plants in the island of Cebu, under abuild-operate-transfer contract to supply 62 megawatts of power to Visayan Electric Company, Inc. (VECO).

Although by contract the CPPC plant will revert to VECO in November 2013, APC and the other controlling VECO shareholders consider the CPPC plant too vital to VECO’s operations to risk another change in CPPC’s ownership.