Aboitiz eyes green shift after $1.6-B investment from Japan's JERA

Bruce Rodriguez, ABS-CBN News

Posted at Sep 28 2021 06:25 PM

 MANILA – The Aboitiz Group said it will speed up its sustainability shift after getting up to $1.58 billion from the sale of part of its stake in its power business.

Aboitiz Equity Ventures (AEV) president and CEO Sabin Aboitiz said the conglomerate needs to come out of its legacy businesses and "move into modern business." 

"This provides us the capital to do that - to take opportunities that come from the pandemic. The next three years will have a lot of consolidation in our industries," he added.

On Monday, AEV announced that one of Japan's biggest power distributors, JERA, is set to secure a 27 percent stake in Aboitiz Power (AP) for $1.56 billion.

The transaction involves a 25 percent stake owned by AEV while 2 percent would be coming from the Aboitiz Family's privately-held parent company.

Upon completion of the transaction, AEV will still own 52 percent of Aboitiz Power, and Aboitiz said they intend to keep their EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) share in their power unit at a minimum of 50 percent.

For his part, AP president and CEO Emmanuel Rubio said, with JERA's 80 gigawatts of capacity and its expertise on liquefied natural gas, the partnership can help the company further diversify its fuel mix.

"Certainly, that would benefit us from their experience and expertise as being one of Japan's largest power generators. This would be transformational for AP. It will expand our network outside of the country and increase our optionality."

He added, JERA can help AP achieve its 10-year vision of increasing its generation portfolio to 9,200 megawatts, by adding 3,700MW of renewable energy capacity resulting to a 50:50 balance between its Cleanergy and thermal portfolios.

Likewise, JERA has been pursuing a net-zero carbon emission target for 2050, according to Rubio.

Aside from potential expansions and diversifications, AEV chief financial officer Manuel R. Lozano said, the proceeds from the share sale can also be used to improve the group's debt standing.

"This will really drive growth for all of our business units. We're lucky that all of them are doing well and the number of opportunities to achieve our goals are available," he noted.

But he stopped short of providing any details on potential new businesses but he said, opportunities are "across the board."

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