SMC Global Power, part of Filipino conglomerate San Miguel Corporation has signed agreements to acquire two coal power plants of 965MW capacity and a 10MW energy storage project in Philippines for $1.855bn.
The sellers are US-based power company AES and Electricity Generating Public Company (EGCO Group), a Thailand-based independent power producer.
The transactions include the 630MW Masinloc coal-fired power plant, the 335MW Masinloc 2 coal-fired power plant and the 10MW Masinloc energy storage project. While the Masinloc coal plant and the energy storage project are in operation, the Masinloc 2 coal plant is under construction.
The transactions have a total enterprise value of nearly $2.4bn and are owned and operated by Masinloc Power Partners (MPPCL), a joint venture between AES subsidiary AES Phil Investment and EGCO subsidiary Gen Plus.
With AES, SMC Global Power has agreed to buy the latter’s stake of 51% in the assets alongside a similar stake in its subsidiary Masin-AES for $1.05bn. Masin-AES owns the business interests of AES in Philippines.
AES president and CEO Andrés Gluski said: “We are very proud of our operational and commercial success in the Philippines, enabling Masinloc to be a strong and growing business in the dynamic Philippine energy market.
“We will use the proceeds from the sale to pay down Parent debt, which will allow us to achieve investment grade metrics one year early, in 2019. Further, we are establishing a goal to attain investment grade ratings by 2020.”
In the other deal, SMC Global Power agreed to buy the remaining 49% stake in the three power assets owned by EGCO Group for $850m.
EGCO stated that it intends to use the sale proceeds to develop new investment opportunities.
The transactions are anticipated to be completed in the first half of 2018 and would be subject to regulatory approval by the Philippine Competition Commission (PCC).
Image: SMC Global Power to buy two coal-fired plants in Philippines. Photo: courtesy of alex_ugalek/ FreeDigitalPhotos.net.