SMC buys Masinloc for $1.9b

San Miguel Corp. said power unit SMC Global Power Holdings Corp. acquired the stakes of AES Corp. of the US and Electricity Generating Public Co. of Thailand in Masinloc Power Partners Co. Ltd. for $1.9 billion.

“We are happy to be able to acquire Masinloc. The additional power assets provide us an opportunity to increase our footprint in clean coal technology that provides reliable and affordable power, particularly in Luzon,” SMC president and chief operating officer Ramon Ang said.

The enterprise value of MPPC was estimated at $2.4 billion.

“In fact, we have substantially reduced emissions even from our existing power plants to continue promoting the economy’s growth and produce energy in environmentally responsible way,” Ang said.

AES announced plans to sell its remaining 51-percent stake in MPPC a few months ago for around $1 billion and SMC was among those that expressed interest to participate in the auction.

Ang said the San Miguel Group opted to acquire the stake of Egco in MPPC because “they requested” it.

MPPCL owns and operates the existing 630-megawatt coal-fired power plant, its 330-MW expansion now under construction and 10-MW battery energy storage facility, all located in  Masinloc, Zambales.

The sale involved the 51-percent stake of AES Phil Investment Pte. Ltd., a wholly-owned subsidiary of AES and 49-percent stake of Gen Plus B.V., a subsidiary of Egco.

“The transaction is expected to close in the first half of 2018 subject to the approval of the Philippine Competition Commission and relevant closing conditions agreed by the transaction parties,” Egco president Jakgrich Pibulpairoj said in a disclosure to the Stock Exchange of Thailand.

Egco said it could utilize proceeds of $850 million from the divestment “to develop new investment opportunities for the company.”

AES  earlier sold its 45-percent interest in Masin-AES Pte Ltd., a wholly-owned subsidiary of AES that owns its business interests in the Philippines including the 630-megawatt Masinloc coal plant to Egco for $453 million in September 2014.

AES acquired the Masinloc coal plant from the government in 2008 for $930 million. The plant began operating in 1998 and consists of two 300-MW units utilizing coal from different sources.

Ang earlier said the company would participate in any state-owned asset up for bidding as part of its support to the government.

SMC Global Power, the power generation arm of SMC, is one of the country’s biggest power plant operators. It  has three power plants under its IPPA portfolio. These are the 1,218-MW Sual, 735-MW Pagbilao and 345-MW San Roque power plants.

SMC’s South Premiere Development Corp. was also the administrator for the 1,200-Ilijan power plant in Batangas.  The Ilijan natural gas plant was constructed and owned by Korea Electric Power Corp. under a build-operate-transfer scheme that would expire on June 4, 2022.

SMC Global Power also owns a 60-percent stake in the 218-MW Angat hydro power plant and expects to complete the first phase of its power plants in Malita, Davao del Sur and Limay, Bataan.

Topics: San Miguel Corp
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