Ayala, Metro Pac tie up for Angat bidding

MANILA, Philippines - Ayala Corp. (AC), the oldest and one of the biggest conglomerates in the country, has teamed up with the Metro Pacific Investments Corp. (MPIC) to bid for the 246-megawatt Angat hydroelectric power plant in Norzagaray, Bulacan in line with plans to venture into the power generation and transmission business.

In separate disclosures to the Philippine Stock Exchange, AC and MPIC said they signed an agreement Wednesday to participate in the privatization of the Angat power plant through Michigan Power Inc., an AC unit.

Michigan power has already submitted a letter of interest to the Power Sector Assets and Liabilities Management Corp. (PSALM), the state agency overseeing the sale of the assets of the National Power Corp., with respect to the bidding for Angat.

AC said Michigan power will subsequently be co-owned with MPIC, subject to allocation of required equity to a technical partner in accordance with the bidding procedures.

“This initiative is in line with Ayala’s desire to participate in the power sector, especially in the realm of clean and renewable energy,” AC said.

AC has long been setting its sights on the power generation or transmission business as early as 2006 when it expressed interest in the various power assets being auctioned off by the government.

Since then, however, AC could not justify the large capital outlay involved with the expected returns on investment, believing that asset prices did not accurately reflect their underlying values.

The Ayala Group has a portfolio of diverse business interests including investments in banking, real estate, telecommunications, information technology, water infrastructure and management, and business process outsourcing. It also has interests in electronics manufacture and car dealership.

MPIC, which is now in telecommunications, healthcare, toll roads, water and most recently, electricity distribution, continues to explore opportunities on the horizon to further beef up its investment portfolio.

A decade after parent firm First Pacific Co. took over the country’s most valuable company, Philippine Long Distance Telephone Co. (PLDT), the group has acquired a majority stake in the nation’s largest power retailer, Manila Electric Co. (Meralco).

The local businesss landscape is now being re-shaped by how conglomerates are beefing up their own portfolios through aggressive expansions and diversification.

Among the other groups that have signified interest to bid for the Angat power facility include SN Aboitiz Power and the Lopez family’s First Gen Corp. Food and drink conglomerate San Miguel Corp. was also earlier reported to have expressed interest to join the bidding for Angat.

The Angat hydropower plant began commercial operation in July 1967. It has four main facilities with a combined capacity of 200 MW, as well as five auxiliary units which have combined capacity of 46 MW.