Aboitiz Power IPO seen to raise P8.4B

Aboitiz Power Corp., a wholly-owned subsidiary of the Cebu-based Aboitiz Equity Ventures Inc., is planning to raise as much as P8.4 billion from an initial public offering (IPO) of its shares possibly in June or July this year.

A company official said they are looking at selling about 1.8 billion shares to both local and foreign investors at P4.67 per share.

The same source said UBS Investment Bank will serve as sole international underwriter and issue manager.

"We’re targeting to list after the elections. Hopefully, we can secure all the necessary approvals from securities regulators by May or June," the source added.

Proceeds from the offering will be used to enhance Aboitiz Power’s position as a participant in the privatization of state-owned power assets as well as in the development and acquisition of additional power projects.

Aboitiz Power is the holding firm for all power generation and distribution assets of the Aboitiz Group. It has an authorized capital of P17 billion.

Since its inception in 1998, Aboitiz Power has accumulated interests in power generation facilities with a total installed capacity of 686 megawatts as of end-2006.

Last December, the company and its Norwegian partner SN Power, through their joint venture company SNAP, won a government bidding for the 360-megawatt Magat hydroelectric plant in Isabela.

The company also acquired ownership interests in a 50-megawatt thermal plant in Mactan Island and a 70-megawatt thermal plant in Cebu City.

Among the companies under Aboitiz Power include Davao Light & Power Co. Inc., (DLPC) Visayan Electric Co. Inc., (VECO) Hijos de F. Escaño Inc., Cotabato Light & Power Co., Subic Enerzone Corp., San Fernando Electric Light and Power Co., Pampanga Energy Ventures Inc., and Aboitiz Energy Solutions Inc.

VECO and DLPC are the second and third-largest privately-owned distribution utilities in the country in terms of both customers and annual power sales. Last year, the group’s distribution companies distributed 3,498 gigawatt hours of electricity to 616,261 customers.

Aboitiz Powers public offering is consistent with the provisions of the Electric Power Industry Reform Act (EPIRA) which calls for broader public ownership of electricity distribution and generation assets.