Aboitiz delays asset sale in Batangas due to pandemic

AboitizPower IPO

Aboitiz Power Corporation said it will hold back its plan to unload its 8.8-megawatt (MW) biomass power plant assets in Lian, Batangas amid the spike in COVID-19 cases.

Based on a report from The Philippine Star, AboitizPower President and CEO Emmanuel Rubio said there are investors interested in buying the plant’s equipment. However, travel restrictions have delayed inspections and due diligence on the facility. 

Rubio specified that their serious buyers cannot do due diligence on the equipment because their engines cannot travel. 

Metro Manila and its immediately surrounding provinces have been under enhanced community quarantine since March 29, while Batangas is under general community quarantine at least until April 30.

Due diligence in business refers to an investigation or review performed to confirm facts or details of a matter under considerations. 

The 8.8MW plant is the firm’s first biomass project which supposedly began commercial operations in the second quarter of 2017.

Aseagas Corporation, a subsidiary of AboitizPower through Aboitiz Renewables Inc., was responsible for the firm’s investments in renewable energy. However, Aseagas closed shop in January 2018. Before that, the plant was forced to extend its suspension toward the end of 2017 due to lack of feedstock. 

The closure resulted in an average Php3.7 billion affected total value, which represents Aseagas investment equity of Php3.45 billion and an estimated Php250 million remaining obligations of the company. 

AboitizPower then aimed to unload its biomass power plant assets by the end of 2019. For this purpose, the company tapped Astoca Inc., a major industrial asset disposal and valuation advisory firm in Asia. However, AboitizPower’s contract with Astoca expired even before the assets were sold.