MANILA, Philippines — SMC Global Power Holdings Corp., the energy unit of diversified conglomerate San Miguel Corp. (SMC), has completed the acquisition of the Masinloc power plants valued at $1.9 billion.
In a statement, Thai power firm Electricity Generating Public Co. Ltd. or EGCO Group said it successfully unloaded its interest in the Zambales-based power plant. The divestment allowed it to immediately book $850 million in earnings.
EGCO president Jakgrich Pibulpairoj said Gen Plus B.V. – a wholly owned subsidiary of EGCO Group – completed the transfer of its 49 percent indirect ownership interest in Masinloc Power Partners Co. Ltd. to SMC Global on March 20.
“Accordingly, EGCO Group recognized the proceeds from the divestment transaction worth $850 million. EGCO Group plans to use these proceeds for new investment projects in the future,” he said.
In another statement, American energy giant AES Corp. also said it has closed the sale of its entire 51 percent interest in its businesses in the Philippines to SMC Global for $1.05 billion.
It said the proceeds would be used to retire $700 million of the aggregate principal amount of its senior unsecured notes due 2024 and 2025 that were recently tendered.
Meanwhile, the balance of the proceeds will primarily be used to retire approximately $250 million of other debt.
Following the sale, S&P Global Ratings (S&P) upgraded AES’ credit rating to BB+ from BB as a direct result of accelerated debt reduction from asset sale proceeds.
In December 2017, SMC Global signed share purchase agreements with AES Phil Investment Pte. Ltd. and Gen Plus B.V. for their respective stakes in Masinloc Power Partners Co. Ltd. (MPPCL).
MPPCL owns the 630-megawatt (MW) Masinloc coal-fired power plant in operation, the 335-MW Masinloc 2 coal-fired power plant under construction and the 10-MW Masinloc energy storage project in operation.
The deal was approved by the Philippine Competition Commission (PCC) last month.
Earlier this month, SMC Global secured funding arrangements to finance the Masinloc plant acquisitions, which include up to $700-million unsecured syndicated facility agreement with Mizuho Bank Ltd.-Singapore Branch, Standard Chartered Bank and Sumitomo Mitsui Banking Corp.-Singapore Branch, and the issuance of $650-million redeemable perpetual securities.