By James A. Loyola
Aboitiz Equity Ventures Inc. (AEV) is planning to raise P30 billion from the issuance of fixed-rate peso-denominated retail bonds that will be shelf registered with the Securities and Exchange Commission.
In a disclosure to the Philippine Stock Exchange, AEV said the retail bonds have been approved by its Board of Directors and will be issued in one or more tranches depending on market conditions.
The bonds are expected to be offered to the general public in 2019. AEV is also planning to list the Bonds with the Philippine Dealing and Exchange Corporation.
AEV said it will use the proceeds of the retail bonds to finance planned acquisitions, future investments, and other general corporate requirements.
The firm is planning capital expenditures of P50 billion to P60 billion this year, similar to the amount it expects to have spent in 2018, mainly for its power and water businesses.
n an interview last last year, AEV Chief Financial Officer Manuel Lozano said that, “at this point in time, I think we’ve already spent about maybe three-fourths of what we’re expecting to spend. Some of the projects have spilled over to 2019.”
Lozano said the bulk of this year’s capex “will be for power, but now we already have Apo Agua for water– that’s going to be big also. Land has several projects that we started. So I think now you’re going to see a little bit more from the other subsidiaries.”
For AEV’s power business, Lozano said “one transaction that hasn’t been completed yet is the GNPower acquisition from Ayala, we would need to raise funding for that. That’s about $579 million.”
He added that both AEV and subsidiary Aboitiz Power Corporation are looking at the possible issuance of retail bonds to raise additional funds. While AEV has yet to do this, AboitizPower had done this in 2015 and still has P17 billion remaining from its shelf registered bonds.
“(For AEV) our plan is to do a shelf, get it already started next year, and then depending on our investments we can either do a bigger offering later in the year or in 2020,” said Lozano.
He added that, “very likely we will do something in the retail bonds. Maybe within P30 billion in the shelf, two placements I guess. The shelf lasts for three years, so I think P10 billion a year on average is not unreasonable especially since we’re still growing a lot of our business.”