Aboitiz considers planned IPO of RE business unit
BY MYRNA M. VELASCO
Aboitiz Power Corporation is evaluating the “premium” it could earn from the proposed initial public offering (IPO) of its subsidiary Aboitiz Renewables Inc. (ARI), which houses the group’s various renewable energy assets.
According to Liza Luv T. Montelibano, Aboitiz Power’s chief financial officer, the main bone of contention being evaluated in the proposed stock offering is the premium the company could earn from the offering on the local stock exchange.
“At a point where the price we can ask for our pipe is already giving us a premium over a stock price, if we go public, it’s trying to see what the best window is to take value out of.” optimizing fact that we have in this existing portfolio,” she said.
There’s no definitive timeframe for ARI’s proposed public listing just yet, with Montelibano stressing that they’re still getting a sense of how the market will bring rewards to the company once it debuts publicly, whether that’s based on the presence of a Portfolio from renewable energies or on the targeted investment growth.
“When it’s already that well valued and you do an IPO, there’s time for that,” noted Aboitiz Power’s chief executive.
At this stage of the company’s planning, Montelibano emphasized that the advantage is that there are investors who want pure renewable energy. “So today’s investors, if they want pure renewable energy, that’s actually the value of ARI,” she said.
Emmanuel V. Rubio, Aboitiz Power’s President and CEO, stated that the other factor to consider will be “the impact” of ARI’s stock offering to the parent company, as some of Aboitiz Power’s assets will need to be spun off and will be placed under ARI to increase value for shareholders when the RE business entity is listed.
Company executives said operating assets under ARI totaled 1,100 megawatts – including the attributable capacity of its joint venture SN Aboitiz Power (SNAP); plus the assets under its various RE-backed subsidiaries, such as ` Renewables Inc. (APRI) for geothermal; Hedcor Inc. for run-of-river power plants; and the series of solar investments the company is transitioning into commercial operations.
The next project pipeline for renewable energy plants, which will be cast by the Aboitiz Group, will include 1,000 megawatts by 2025; and that will ramp up to the order of 3,700 MW by 2030.
At least two solar projects – including the 94MW Cayanga project in Pangasinan and the 168MW Peak Laoag solar project in Ilocos Norte – will reach the commercial operation stage by next year; and the other is the 17 MW Tiwi Binary Geothermal Plant in Albay.
“It covers the ability to execute commitments and the value of your pipeline… the pipeline is something that we develop,” Rubio pointed out.
Carlos Aboitiz, Aboitiz Power’s Chief Corporate Services Officer, also said, “One of the questions we’re asking is not so clear whether it’s a premium for renewable energy or a premium for growth. So it’s difficult to separate the two.”
However, he qualified that there are serious matters that need to dig deeper into the assessment process, “like everything that’s happening now, where energy security is taking center stage – and where the world is waking up to the fact that renewable energy isn’t the right silver bullet.” for a very complex problem…if the world accepts that fact and still assigns the same bounty, then it’s a good opportunity to wait and see.”
Aboitiz claimed, “We don’t have to do it now (IPO), so it’s a good opportunity to wait and see how the market grows.”
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