Sy group set to consolidate power assets

MANILA, Philippines – Plans of the business group of retail tycoon Henry Sy Sr. to restructure and recapitalize its power assets so it could ride on the expected increase in the demand for power are underway.

On Tuesday, June 18, shareholders of APC Group Inc., which is 46% owned by Sy-led Belle Corp, approved the company’s restructuring plan ahead of the reported moves to transform the company into an entity that will possibly hold all the energy-related assets of the family of the country’s richest man.

The company is now considering various options, according to APC president Frederic C. Dybuncio during an interview with reporters following the company’s annual stockholders meeting.

“We are still studying what options there are. But at least the company has clearer position, no more baggage from the past. It is easier now to make the company grow,” Dybuncio said.

“The direction we are taking is natural resources because that is what we have now,” he added.

The restructuring plan involves the reduction the par value of the company’s shares from P1 to P0.35 per share. This would generate P4 billion in additional paid-in capital, which would be used to reduce the company’s current P7 billion deficit.

APC Group hopes to complete the restructuring within the year.

The Sy family has interests in retail, banking, real estate, mining, and other industries that are heavy consumers of electricity.

Chevron partnership

The Sy-led SM group, through unit All First Equity Holdings, also has a joint venture with oil giant Chevron for the geothermal power business in the Philippines

The two formed Philippine Geothermal Power Production Co. Inc. in December 2012, with the SM group owning 60% and Chevron owning the remaining 40%. This structure complies with the Constitution’s limit on foreign equity ownership of entities engaged in the exploration of indigenous or renewable energy resources.

Chevron already has two geothermal power projects – the Tiwi and Makiling-Banahaw power plants located in Albay and Laguna provinces.

The Sys, through its partnership with Chevron, is also looking at other geothermal development opportunities in Cebu, Bohol, Palawan, Samar, Northern Luzon primarily as Kalinga, as well as in Mindanao, in a bid to become a significant player in the local renewable energy sector.

Chevron is also the partner of APC Group in the development of 100 megawatt geothermal power plant in Kalinga, Apayao. The $300 million plant is scheduled to be operational by late 2017 or early 2018.

“Drilling of the exploratory wells will be started by the third quarter of 2014. The exploration wells will take about 6 months of complete. If the results of the exploration wells prove the existence of steam resource, construction of the power plant will be started,” APC Group said. – Rappler.com