MANILA, Sept 27 (Reuters) – Aboitiz Power Corp, one of the Philippines’ biggest electricity producers, has struck a deal to pay $579 million for a stake in Ayala Corp’s thermal energy platform, the two companies said on Thursday.

This is the sixth-largest domestic merger-and-acquisition deal, and the fourth biggest in the local energy sector, over the past three years, data from Thomson Reuters showed.

The deal will provide fresh funds to Ayala’s unit, AC Energy, to help expand its domestic and offshore renewable energy businesses, and is in line with its target of achieving a 50-50 capacity mix between coal and renewables from the current 80-20 mix.

Aboitiz will acquire a 49 percent voting stake and 60 percent economic interest in AA Thermal, AC Energy’s newly formed thermal platform in the Philippines.

AA Thermal’s assets will initially comprise AC Energy’s limited partnership interests in GNPower Mariveles Coal Plant Ltd Co, which owns and operates a 632-megawatt facility in Bataan province, north of Manila, and in GNPower Dinginin Ltd Co, which is constructing a 1,336-MW plant also in Bataan.

Aboitiz, which is already one of Ayala’s existing partners in both GNPower Mariveles and GNPower Dinginin Ltd, said the acquisition will increase its beneficial ownership in Mariveles project to 78.325 percent, and to about 70 percent in the Dinginin project.

The first of the two 668-MW Dinginin units is scheduled to go online in 2019.

Ayala, one of the Philippines’ biggest conglomerates, and Aboitiz said the base price of $579 million is subject to adjustment at transaction closing, the timetable for which was not specified in the stock market disclosures.

The Philippine Stock Exchange suspended trading in Aboitiz Power shares on Thursday pending the company’s compliance with disclosure requirements. Ayala Corp was down 0.8 percent by midday.

AC Energy expects to expand its overall capacity to more than 5,000 MW by 2025 from 1,600 MW, as it looks for more potential acquisitions in renewables in Southeast Asia, company officials had told Reuters in an interview in May.

Aboitiz, in a statement, said the acquisition is part of its strategy to reach its goal of 4,000 MW net attributable capacity by 2020, from around 3,300 MW currently.

Source: NASDAQ