Increasing interest for stakes in Philippine’s EDC
Alexander Richter
13 Nis 2009
There is an increased interest for stakes in the Energy Development Corp. (EDC). While some eye - like Ayala Corp. - an investment in the company itself, Japanese Marubeni is eyeing the holding company Red Vulcan Holdings Corp.
As reported in Philippine’s papers, there is an increased interest for stakes in the Energy Development Corp. (EDC). While some eye – like Ayala Corp. – an investment in the company itself, Japanese Marubeni is eyeing the holding company Red Vulcan Holdings Corp.
Ayala Corp. is a big business conglomerate in the Philippines and “is currently studying the possibility of coming in as a minority stakeholder in EDC”, if there are already active negotiations could not be confirmed so the article. The company is looking into investing into the “clean energy” sector.
The stock of EDC has seen a 70% growth since March, with a market capitalization of US$ 1.36 billion. EDC belongs to the conglomerate of the Lopez family, with First Gen Corp. – also listed – as the power generation unit of the group. “First Gen wholly owns Red Vulcan Holdings Corp., the majority owner of the geothermal power producer EDC through its purchase of P58.5 billion worth of shares equivalent to a 60-percent stake in the geothermal firm in 2008” (source. First Gen Corp. news item).
First Gen Corp. is currently in discussions with various parties, including Japanese Marubeni, on the potential sale of up to 40% in Red Vulcan.
These discussions and the potential sale are simply aimed to fulfill funding requirements of the company.
“EDC, which used to be owned by the state firm Philippine National Oil Co., began commercial operations in 1983 and debuted on the local stock market in 2006. It engages in the exploration for, development and production of, energy resources in the Philippines.
Its operations consist primarily of electricity sales, steam generation, electricity generation and third party drilling. It operates 12 geothermal steam fields in five service contract areas where it is principally involved in the production of steam for sale to the National Power Corp.
From January to September last year, EDC had a turnover of P13.6 billion (US$ 285 million), of which the bulk of P8.3 billion came from the sale of electricity. During this period, it chalked up a recurring net income of P4.51 billion, up by 34.3 percent year-on-year.
EDC’s five services areas are: Leyte Geothermal Production Field, Southern Negros Geothermal Production Field, Bacman Geothermal Production Field in Luzon, Mindanao Geothermal Production Field and Northern Negros Geothermal Production Field.”
Source: Philippine Daily Inquirer
