Listed firm Aboitiz Power Corporation acquired 35.4 percent of STEAG, its German partner in the 210-Mindanao coal-fired power project in Misamis Oriental for $36.081 million, bringing its ownership to 69.4 percent in the coal plant and further beefing up its coal-fired power generation portfolio.
In the share purchase agreement (SPA) executed in September 15 this year, it was stipulated that the purchase price was at $0.226 per share and the total amount has an integrated locked box interest at a simple rate of 4.0 percent per annum.
A one-time cash payment has been prescribed on the closing date that will be consummated following “customary conditions precedent for transactions” including the submission of corporate approvals and other third-party consents.
“Aboitiz Power will end up owning 69.4 percent equity interest in the company (STEAG State Power Inc.) after completion of the acquisition,” the buyer firm noted. Prior to this equity acquisition, Aboitiz Power has 34-percent stake in the STEAG plant.
The Aboitiz firm effectively snatched the deal from industry opponent SPC Power, the first company which cemented a deal on the purchase of STEAG’s equity in the coal plant.
Aboitiz Power indicated that it exercised its “right of first refusal (ROFR) to purchase the portion it is entitled to which is equivalent to 35.4-percent of the total issued and outstanding capital stock of the company.”
It is highly perceived in the power industry that SPC and Aboitiz Power can’t be in bed together for power ventures because of the deeply-scarred legal fight they had been enmeshed with on the Naga thermal power facility when it was privatized by state-run Power Sector Assets and Liabilities Management Corporation (PSALM) roughly 10 years ago.
To recall, the Naga facility was first won by SPC, but the thermal asset eventually went into the hands of Aboitiz Power on the strength of a ruling rendered by the Supreme Court.
On the STEAG shares divestment, Aboitiz Power conveyed that it “received a transfer notice from STEAG GmbH (“STEAG”) of its intention to sell its shares in the company.” The board of directors of Aboitiz Power approved the acquisition on August 24 this year.
“Aboitiz Power is continuously managing and optimizing its generation portfolio, both in thermal and renewable energies,” the company said.
With its reinforced coal portfolio, Aboitiz Power emphasized that “this is a good opportunity to help sustainably manage an existing generation facility, which is a vital component of the Mindanao grid, and provides affordable and reliable power to many Filipinos.”
The power firm qualified that once the interconnected Mindanao-Visayas power grids will reach commercial operation this year, the coal plant “will be able to export much-needed capacity to the Luzon grid, which has experienced tightness of supply reserves in recent years.”