Philippines' Ayala looks to sell big stake in coal unit, turn to renewables

MANILA (Reuters) - AC Energy Inc, part of Philippine conglomerate Ayala Corp AC.PS, on Monday said it could sell a stake of up to 50 percent in its coal-fired energy unit, using funds from the deal to boost its renewables business in Southeast Asia.

AC Energy is in talks with potential partners that could be interested in taking a stake in its wholly-owned AC Thermal unit, company officials said, although they declined to identify would-be investors or give any indications on price.

“We cannot go on record with respect to valuation,” AC Energy President and CEO Eric Francia said in an email to Reuters on Monday, declining to comment on local newspaper reports saying the sale may raise up to $1 billion.

AC Energy’s assets are 80 percent thermal and 20 percent renewable, with a total value of 135 billion pesos ($2.6 billion), according to a recent CLSA report.

Its thermal assets include the 632-megawatt GNPower Mariveles coal plant, a partnership with Aboitiz Power Corp's AP.PS subsidiary Therma Power and Power Partners, and the 552-MW GNPower Kauswagan, in which it has an 85 percent economic stake.

The company said it was open to a partnership with both local and foreign investors for the unit, and would make a final decision within the year.

The company expects to expand its overall energy capacity to more than 5,000 megawatts by 2025 from 1,600 MW currently.

Following its acquisition of Salak and Darajat geothermal assets in Indonesia in 2017, AC Energy is assembling a portfolio of renewable energy assets in the region this year, including a 75 MW wind project in Indonesia and over 300 MW of solar projects in Vietnam.

AC Energy nearly doubled its net profit to 593 million pesos in the first quarter of this year, boosted by robust contributions from its Indonesia investment and from its coal and renewable platforms.

“We will not stop investing in the Philippines, but we also see a lot of opportunities outside, within the Southeast Asian market,” a company spokeswoman told Reuters. “The objective is to reach a 50-50 mix by 2025.”

Reporting by Enrico dela Cruz; Editing by Joseph Radford