The AES Corporation (NYSE: AES) announced today that it has entered into an agreement to sell 45% of its interest in Masin-AES Pte Ltd, a wholly-owned subsidiary of AES that owns AES’ business interests in the Philippines, to Electricity Generating Public Company Limited (EGCO Group), a Thailand-based Independent Power Producer (IPP), for $453 million. The sale includes indirect stakes in the following: the 630 MW Masinloc coal-fired power plant in operation since 1998; expansion of the existing Masinloc facility; and approximately 60 MW of potential energy storage projects in advanced development. After the sale, AES will own a 51% net stake in Masinloc, EGCO Group will own 41%, and the International Finance Corporation (IFC) will retain 8%. AES will continue to manage and operate the plant. AES and EGCO Group have agreed to use the Masinloc platform as their exclusive vehicle for growth in the Philippines.
“This transaction demonstrates how we are executing on our strategy, by bringing in partners to realize the value of our portfolio and capitalize on the growth potential across our markets,” said Andrés Gluski, AES President and Chief Executive Officer. “We see attractive growth opportunities in the Philippines and are well-positioned to invest in the expansion of our existing plant, as well as energy storage projects, with our partners.”
In 2008, AES purchased a 92% interest in Masinloc, with IFC as minority partner, for total enterprise value of $1.1 billion. The acquisition was funded with equity contributed by AES and IFC and $635 million of non-recourse debt. Since the acquisition, AES has executed a successful operational and commercial turnaround of the plant that has made Masinloc a significant contributor of earnings and cash distributions, as well as a reliable provider of power in the Philippines. Earlier this year, AES relocated its Asia Strategic Business Unit (SBU) headquarters to Manila, in order to generate cost savings and to demonstrate the Company’s commitment to growing in the Philippines.