Aboitiz Equity Ventures (AEV) is selling a 25.01 percent stake in Aboitiz Power Corporation (AboitizPower) to JERA Co. Inc., Japan’s largest power producer, for $1.146 billion in cash.
In a disclosure to the Philippine Stock Exchange, AEV said the Aboitiz family’s privately held parent company has also agreed to sell an additional 1.99 percent stake in AboitizPower, bringing JERA’s total post-transaction stake to 27.0 percent through JERA Asia Pte. Ltd.
AEV will still own a controlling stake of 52.0 percent in AboitizPower upon completion of the transaction, down from the current 77 percent.
“This transaction unlocks significant capital that will be used toward fueling the AEV Group’s growth initiatives,” said Aboitiz Group President and Chief Executive Officer Sabin M. Aboitiz.
He added that “Most importantly, we look forward to the new strategic partnership with JERA as we welcome their trust, expertise, and commitment to help the AEV Group drive change for a better world by accelerating Philippine economic growth and promoting the development of clean energy.”
AboitizPower and JERA have identified potential areas for collaboration across multiple fronts including; joint development of LNG-to-Power projects; the fuel sourcing and management of LNG; potential participation in aspects of plant O&M; and exploration of the use of new generation technologies.
“We look forward to working collaboratively with JERA to achieve our 10-year vision of increasing our generation portfolio to 9,200MW, by adding 3,700MW of RE capacity resulting in a 50:50 balance between our Cleanergy and thermal portfolios,” AboitizPower President and Chief Executive Officer Emmanuel V. Rubio said.
The sale consists of 1.84 billion AboitizPower shares at about P40.81 per share—a premium of 19 percent from the closing price of P32.40 as of Sept. 27, 2021.
AEV said the valuation was undertaken by JERA following due diligence review of AboitizPower’s assets. The amount will be paid in full at closing, subject to adjustment for any dividends distributed from signing to closing.
The sale will be executed through a special block sale after the closing of the transaction and subject to PSE’s approval. Customary closing conditions also include the completion of any applicable Philippine Competition Commission (PCC) process; and approval and ratification by the AEV shareholders through a Special Stockholders’ meeting scheduled for December 9, 2021.
JERA’s Philippine affiliate, TPEC Holdings Corporation, is a joint venture partner of AboitizPower’s holding company for its thermal power generation assets, Therma Power Inc., in Pagbilao Energy Corporation.
“The transaction and the resulting interest allows AboitizPower to benefit from the experience and expertise of Japan’s largest power generator, and releases significant cash proceeds to AEV that allows it to pursue the Aboitiz Group’s growth objectives,” AEV said.
It added that the transaction will result in a net reduction of carbon exposure for AEV; increase in financing flexibility for AEV, with significant upfront capital made available to fund growth plans; and AEV will continue to own, control and consolidate AboitizPower.