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AES agrees to sell equity interest in Philippines businesses for USD1.05bn

The AES Corporation (AES) is to sell its entire 51 per cent equity interest in Masin-AES Pte Ltd, a subsidiary of AES that owns AES’ business interests in the Philippines, to SMC Global Power Holdings Corp (SMC Global Power) for USD1.05 billion in proceeds to AES.

The sale includes AES’ 51 per cent equity interest in the 630 MW Masinloc coal-fired power plant in operation, the 335 MW Masinloc 2 coal-fired power plant under construction and the 10 MW Masinloc energy storage project in operation.
“We are very proud of our operational and commercial success in the Philippines, enabling Masinloc to be a strong and growing business in the dynamic Philippine energy market,” says Andrés Gluski, AES President and Chief Executive Officer. “We will use the proceeds from the sale to pay down Parent debt, which will allow us to achieve investment grade metrics one year early, in 2019. Further, we are establishing a goal to attain investment grade ratings by 2020.”
The transaction is expected to close in the first half of 2018, subject to regulatory approval by the Philippine Competition Commission (PCC). SMC Global Power is also purchasing the remaining 49 per cent equity interest in the same assets, held by Electricity Generating Public Company Limited (EGCO Group), a Thailand-based Independent Power Producer, for USD850 million. The transaction has a total enterprise value of approximately USD2.4 billion.
In 2008, AES purchased a 92 per cent interest in Masinloc, with the International Finance Corporation (IFC) as a minority partner, for total enterprise value of USD1.1 billion. The acquisition was funded with equity contributed by AES and IFC and USD635 million of non-recourse debt. In 2014, AES sold 41 per cent of Masinloc to EGCO Group for USD453 million.

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