Alsons to sell more shares to Toyota Tsusho

MANILA, Philippines – Listed Alsons Consolidated Resources Inc. of the Alcantara Group is selling more equity to Japan’s Toyota Tsusho Corp. or to new equity investors to bankroll the construction of another unit in its Sarangani power plant.

Toyota Tsusho has already expressed interest in raising its stake in Sarangani Energy Corp. (SEC) to 35 percent from 25 percent, Alsons chairman and president Tomas Alcantara said.

 “That’s always part of the plan, to be able to tap the public for shares. Whether it’s new block investors or we will go to the stock market. We want to maintain effective control of the company and then we have to be mindful of that that we also have Toyota Tsusho who is also already in our company to the extent of 25 percent,” he said.

“They’re already at 25 percent and they want to move up to 35 [percent]. We are both studying it but they have expressed interest in expanding their equity position in our company,” Alcantara said.

SEC is developing a 2x105-megawatt (MW) coal plant in Maasim, Sarangani. The first 105-MW unit began operating in April this year, which was developed with Toyota Tsusho with a 25-percent buy-in in 2012.

The first unit is expected to add at least P150 million in net income this year with its eight-month contribution, Alsons executive vice president and chief operating officer Tirso Santillan said.

 “Its impact in income is estimated to be over P150 million. The project was delayed and it will only operate for eight months this year. The way this structure grows, it’s a gradual increase in tariff. So initially it will have a low contribution and eventually, when it starts its full year operation, it’s about a billion per year,” he said.

Alsons targets to award the engineering procurement and construction contract soon to start construction before the end of the year.

If Toyota Tsusho pushes through with the increase in stake, its additional equity investment would be used as funding for the second 105-MW unit of the SEC plant, Alcantara said.

 “We raise capital only for identified and committed projects. We don’t want to be in the business of holding cash and then looking for projects because you paid for that,” he said.

The SEC plant, which is estimated to cost $570 million in total, is the single largest investment in Sarangani Province and the entire Region 12. 

Apart from the SEC plant, Alsons is eyeing to start building the 15-MW Siguil River run-of-river hydroelectric plant also in Maasim, Sarangani, and the 105-MW San Ramon Power Inc. (SRPI) coal-fired power plant in Talisayan, Zamboanga City before 2016 closes.

The 15-MW Siguil run-of-river power plant would be Alson’s first renewable energy venture, which is expected to start running within 2018.

The 105-MW SRPI plant, on the other hand, is expected to begin operating in 2019 to provide baseload power to Zamboanga City and other key areas in Mindanao.