Following yesterday’s news, Aboitiz Power (AP) is set to acquire 66.10% of GNPower Mariveles and 40% of GNPower Dinginin for USD1.2 bn from the Blackstone Group. GNPower Mariveles owns the 604 MW coal-fired power plant in Mariveles, Bataan which has been in operations since February 2014. The effect of this new plant on AP’s earnings were detailed in yesterday’s AP Corporate News & Analysis. Meanwhile, GNPower Dinginin is developing a 668 MW coal-fired power plant in Bataan. Its Unit 1 will be completed in March 2019 and Unit 2 in January 2020. These are the biggest of six coal-fired power plants in Luzon listed as committed projects by the Department of Energy. In a full year effect of the two units of GNPower Dinginin, AP’s net income is estimated to grow by 6% or PHP1.3 bn from equity in net earnings. The acquisitions are in line with AP’s target of having a 4,000 MW power capacity by 2020. AP will be borrowing from six banks USD650 mn (PHP31.85 bn) to partly finance the acquisition. Interest-bearing debt to equity ratio is estimated to rise to almost 1x from 0.68x from the debt. This is a necessary debt for a golden opportunity to increase power capacity and significantly boost earnings by 14% from both plants combined.
The Coporate News & Analysis report is solely for information. It should not be constituted as an offer for solicitation for the purchase or sale of securities mentioned. The information herein has been obtained from sources believed to be reliable. Whilst every effort has been made to ensure accuracy, we do not guarantee the accuracy or completeness of the report. All opinions and estimates expressed herein constitute our judgment as of this date made on a reasonable basis and are subject to change without notice. No liability can be expected for any loss arising from the use of this report or its contents. As this is general information, it does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may obtain this report.