Aboitiz Power Corp. (AboitizPower), the power arm of conglomerate Aboitiz Equity Ventures Inc., will tap the debt market in the latter part of this year to raise P10 billion from a bond sale to bankroll its ongoing projects.
At a special meeting held on Wednesday, the board of directors of AboitizPower authorized the company’s plan to issue peso-denominated, fixed-rate retail bonds of up to P10 billion. Asked what specific projects would be funded by the bond issue, company officials declined to comment.
“The proceeds of the bonds issuance will be used by AboitizPower to replenish working capital, partially fund ongoing projects, and for other general corporate purposes,” the company said in a disclosure to the Philippine Stock Exchange.
The bonds will be issued in one or more tranches, inclusive of any oversubscription.
The bonds, which are expected to be offered to the general public in the third quarter of 2014, will be registered under the Securities Regulation Code.
The lead arranger and underwriter of the bond issue is BPI Capital Corp. No further details were disclosed.
Early this month, AboitizPower said its unit Therma Visayas, Inc. (TVI) has signed the engineering, procurement and construction (EPC) contracts for its 300-megawatt coal-fired Cebu power plant. The plant will be built in Toledo, Cebu at a cost of P41 billion.
In a previous disclosure to the local bourse, it was reported that TVI, a wholly-owned subsidiary of AboitizPower, has signed the EPC contracts with Hyundai Engineering Co., Ltd and Galing Power Energy Co., Inc. for the establishment of the coal-fired power plant in Cebu.
With the signing of the EPC contracts, TVI will now issue a Notice to Proceed to perform design engineering and detailed physical data collection in preparation for the construction of the plant.
With construction targeted to start by the middle of this year, the plant is scheduled to go online by the third quarter of 2017.