Aboitiz Power secures PCC approval on $579-M equity take in Ayala firm

By Myrna M. Velasco

Listed firm Aboitiz Power Corporation has secured the approval of the Philippine Competition Commission (PCC) on its equity acquisition in the thermal platform of AC Energy of the Ayala group for a transaction worth US$579.2 million.


“Aboitiz Power received the approval from PCC dated February 28, 2019, approving its acquisition of 49% voting stake and 69% economic stake in AA thermal (the Ayala firm),” the company has noted in its disclosure to the Philippine Stock Exchange.

The PCC stipulated that “upon evaluation of the findings and recommendation of the Mergers and Acquisition Office, which included among others, the information obtained from the parties and other sources to-date… the proposed acquisition by Aboitiz Power will not likely result in substantial lessening of competition in the identified relevant markets for power generation and retail electricity supply in Luzon and Visayas.”

It stressed further that “there is no change of control in the operating companies (GNPower Mariveles Coal Plant Ltd. Co. and GNPower Dinginin Ltd. Co.), which would give Aboitiz Power any increased ability or incentive to influence the actions of GMCP and GNPD apart from its existing general partnership interests.”

The acquisition was concretized via the signing of a share purchase agreement (SPA) in September last year between Aboitiz Power and Arlington Mariveles Netherlands Holding B.V., an affiliate of AC Energy.

The parties are expecting to reach financial closing upon the satisfaction of all conditions precedent – the approval of the PCC being one of the major deliverables.

The terms of payment, according to Aboitiz Power, will be “one time lump sum” at the closing of the transaction.

The Aboitiz firm emphasized that “with the receipt of the approval from PCC, the remaining conditions precedents are the approval of AA Thermal’s application for capital increase with SEC (Securities and Exchange Commission),” as well as other deliverables customary for transactions that are of the same nature.

The equity purchase will generally cover AC Energy’s coal-fired power assets under GNPower Mariveles Coal Plant Ltd. Co. and GNPower Dinginin Ltd. Co.; wherein Aboitiz Power also holds direct interests via its subsidiary Therma Power, Inc.

The Ayala group previously apprised media that its sell-down move on thermal assets will be in line with investment trajectory of increasing its renewable energy developments – both in the Philippines and offshore.