Aboitiz Equity Ventures Inc. said Tuesday it will start its transformation into a modern and highly-diversified conglomerate after selling its 25-percent stake in cash cow Aboitiz Power Corp.
AEV president and chief executive Sabin Aboitiz said in a news briefing the group would use the $1.436-billion proceeds from the landmark deal to look for new investment opportunities and support expansion plans.
“This transaction allows us to start the transform the company into a modern company and for us to look for opportunities that are coming out,” Aboitiz said.
“We need to come out of our legendary businesses and move into modern business. So that is what we are looking and this provides us capital to do that—to take opportunities that come from the pandemic. In the next three years I think, there will be a lot of consolidation in our industries. So it is nice to have a stockpile of cash to deploy when these opportunities come, be it our existing businesses or new industries,” he said.
Aboitiz said the company was interested in expanding its infrastructure business and data center.
Meanwhile, AEV chief finance officer Manuel Lozano said the cash to be generated from the transaction would strengthen the company’s balance sheet and open up opportunities for the company to refinance debt and drive expansion of existing business units.
AEV on Monday announced the sale of 25 percent in Aboitiz Power to JERA Co. Inc., Japan’s largest power generating firm, for $1.436 billion.
The Aboitiz family’s privately held parent company also agreed to sell an additional 1.99 percent stake in Aboitiz Power, bringing JERA’s post-transaction stake in the power firm to 27 percent.
AEV will continue to own a controlling stake of 52 percent in Aboitiz Power.
Lozano said the contribution of power generation in the company’s total beneficial EBITDA (earnings before interest, taxes, depreciation, and amortization) would drop from 70 percent in 2020 to 60 percent, after the transaction.