APC unit mulls IPO

MANILA, Philippines - Aboitiz Power Corp. (APC) may undertake an initial public offering (IPO) of its newly created Philippine Hydro Renewables Corp. in the medium term, a company official said over the weekend.

APC senior vice president Luis Miguel Aboitiz said that although this idea has not yet been fully contemplated by the group, this could be the general direction that they would take in the next three to five years.

“Its probably going to be part of our long-term plan. But there’s nothing definite yet. We have to establish a track record for this. We have to reach certain size to make it more attractive to foreign funds,” he said.

“We have to make sure that the foreign investors would look at this company as an attractive investment before listing it to the stock market,” he added.

But at the moment, he said he could not ascertain the timetable for a public offering of the renewables company. “There’s noting concrete in terms of timing,” he said.

So far, he said the group’s renewable energy portfolio is at 550 MW.

The renewables company will put in its wings all the renewable energy ventures of the Aboitiz group which will include its hydro and geothermal assets.

He said the group did not really have plans when it offered the shares of its two companies to the public.

The group undertook an initial public offering of its holding firm Aboitiz Equity Ventures Inc. in 1994 and APC in 2007.

APC has been aggressively engaging in promoting clean energy.

Last week, APC signed an agreement to supply renewable energy to San Fernando Electric Light and Power Co. (SFELAPCO) for three years starting Dec. 26, 2009.

SFELAPCO president Michael Escaler said it would initially get 40 percent of its total demand from APC starting January 2010.

By October 10 next year, the distribution utility will get 100 percent of its 80-megawatt demand from APC.

SFELAPCO is currently sourcing its power demand from the National Power Corp. and the Wholesale Electricity Spot Market (WESM).

The supply agreement is expected to reduce by 40 centavos per kwh the electricity rates of SFELAPCO customers since power sourced from renewable energy is VAT-free. Its franchise area covers barangays in San Fernando City and in the municipalities of Floridablanca, Bacolor, Guagua, Lubao and Santo Tomas.

“We believe that as a distribution utility, it is our primary duty to serve our customers well and at the same time to treat our environment well. By going green, we achieve both goals simultaneously,” Escaler said.