US-led power producer AES Corp. is looking into selling one of its majority stakes in the 630-MW Masinloc power plant in Zambales with a projected value of more than $1 billion.
The news was confirmed by an anonymous source, saying that the deal may represent AES’ exit if the sale would formally proceed as the electricity generator continues to sell its assets to clear debt seeking to achieve an investment-grade credit rating by 2020.
AES Corp. has a 51 percent controlling interest in the Masinloc coal fired power asset, which it acquired in a $930 million bid in 2008.
In 2014, Thailand’s Electricity Generating Public Co. Ltd. acquired 41 percent of its stake while the remaining 8 percent is owned by the World Bank’s International Finance Corp.
The source also said that AES Corp. has already realized its gains from the 2008 acquisition and wants to seek out “good value” from the sale.
Any transaction will add to the $72.8 billion in acquisitions of Asian energy and utility companies over the past 12 months, Bloomberg reports.
Meanwhile, local major utilities like Manila Electric Co. (Meralco) and AboitizPower are positioning to attain the Masinloc unit with both interested parties are preparing to study its participation as soon as the sale is formally announced.
“The process hasn’t been started. It’s up to them… but we have to do all the necessary due diligence,” Meralco President Oscar Reyes said. “AES is an existing, operating generating company. In a sense, you already have something that is potentially cash and income accretive to the business.”
Meralco PowerGen (MGen), Meralco’s generator facility prior to the Retail Competition and Open Access regime, can greatly benefit in earning the Masinloc asset considering that it doesn’t have an existing power plant yet.
On the other hand, AboitizPower said that they will wait for AES Corp. to issue a process letter as they have participated in a similar unit sale, specifically when the Masinloc plant was then operated by the national government, way back in late 2000.
Ayala’s energy unit AC Energy Holdings Inc. is also contemplating the AES asset but decided to review the controlling stake first before participating in the sale.
Currently, AC Energy and its stakeholders, are in the completion stage of its Chevron geothermal power assets, namely the Darajat and Salak geothermal fields in West Java, Indonesia and the Tiwi and Mak-Ban geothermal fields in Southern Luzon, Philippines.