August 28, 2014

AP unit sells 20% equity stake in Visayas power project to VVT subsidiary

In separate disclosures, Aboitiz Power Corp (AP) and Vivant Corp (VVT) announced today that their respective subsidiaries, Therma Power Inc (TPI) and Vivant Integrated Generation Corporation (VIGC) signed a shareholders’ agreement, which involve the investment by VIGC of a 20% equity stake in Therma Visayas Inc (TVI).

Post investment, TPI’s equity stake in TVI will be reduced to 80% from 100%. TVI is the project company that proposes to construct a 2x150 MW coal-fired power generation facility in Barangay Bato, Toledo City, Cebu. Construction of the power plant is targeted for completion by 2017.

Our take: The Cebu coal project is just one of several power projects by AP that is currently in the pipeline. These projects include (1) 300MW Davao coal in 1H15 (commissioning and testing of first 150MW unit in 4Q14); (2) 400 MW Pagbilao coal expansion by end-2017 (JV with TeaM Energy Corp); (3) 14MW Sabangan Hydro in 2015, and (4) 8MW Maris Canal in 2017. Should these projects proceed as schedule, we estimate AP’s attributable capacity will increase by approximately 460MW to almost 2,700MW by 2017. – WealthSec