Antitrust body paves way for Ayala exit from Mindanao power plant
The Philippine Competition Commission (PCC) has cleared the plan of US-based holding company Proverbs 16, Inc. to buy into the shares of three subsidiaries of Ayala Corporation’s energy arm, AC Energy Inc.
This would allow Proverbs to expand its hold on one of the biggest power plants in Mindanao, after the PCC ruled out the possibility that the purchase would harm competition.
The transaction entailed Proverbs 16 Inc.’s indirect ownership of GNPower Kauswagan Ltd. Co. (GNPK) in Lanao Del Norte through the purchase of the shares in three holding companies of AC Energy, BVI (Philco), ACE BVI (b) and ACE BVI (d), PCC said.
These three subsidiaries of AC Energy hold a limited partnership interest over Kauswagan Power Holding Ltd. Co., which in turn has a limited partnership interest in GNPK.
GNPK operates the 552-Megawatt coal-fired power plant project, which is estimated to be completed before the end of the year.
The PCC said in a statement on Wednesday the acquisition of shares in GNPK would not substantially change the makeup of the power generation market, much less the sale of electricity in the relevant markets.
The antitrust body said sufficient competitive constraints would be provided by other power plants in the Mindanao grid and at the electricity spot market.
And even with a bigger share, the firm could not just take control of its customers by way of limiting or cutting their power supply, it added.
The offshore company already currently holds interest in GNPK through Power Partners Ltd. Co and GNPower Holdings GP Corp.
AC Energy Inc., on the other hand, is Ayala Group’s energy platform operating both renewable and conventional power assets.
Following the completion of the transaction, AC Energy, Inc. said it would exit from its investment in GNPK’s power plant project.