Ghost Month: August 11 - September 6

Alsons Consolidated Resources, Inc.
...kuripot na stock so far siya Smile

Alsons wants to play ‘major role’ in Mindanao growth

ALSONS Consolidated Resources, Inc. (ACR) expects to play a “major role” in fueling the economic growth of Mindanao, which it said received a big boost with the signing of the $380-million loan from the Asian Development Bank (ADB) to fund infrastructure projects.

“A critical component to sustain economic progress is the availability of a stable, reliable and affordable supply of energy to meet the growing demands of development,” said Tomas I. Alcantara, chairman and president of ACR, in a statement.

“As a significant power provider in the Zamboanga Peninsula and Mindanao, we know that we have a major role to play in fueling the economic growth in the region by investing in the energy sector and building power plants,” added Mr. Alcantara, who also chairs the Philippines’ Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC).

The ADB loan will finance 11 big-ticket infrastructure projects to improve road networks in Western Mindanao, particularly in the Zamboanga Peninsula, ACR said.

It said the package would bankroll the construction of around 280 kilometers of national, primary, secondary and tertiary roads and bridges in the peninsula and Tawi-Tawi, to be implemented from 2018 to 2023.

Mr. Alcantara said the roll out of infrastructure projects would help maximize the growth potential and hasten the economic development not only of the Zamboanga but the entire Mindanao.

He said the Zamboanga Peninsula would be the contact point of the southern main island in the planned interconnection of the Mindanao and Visayas power grids.

“By the time of completion of the (National Grid Corporation of the Philippines’ prospective Visayas-Mindanao) interconnection project, we will have two operating power plants strategically located in the Zamboanga Peninsula ready to provide power to the Visayas as well,” he added.

The Alcantara power group supplies electricity to the Zamboanga City, the peninsula’s largest population center, through its 100-megawatt (MW) diesel plant of its unit of Western Mindanao Power Corp.

The group operates three other power facilities in Mindanao, namely: the 103-MW Mapalad Power Corp. diesel plant in Iligan City; the 55-MW Southern Philippines Power Corp. diesel facility in Alabel, Sarangani; and the first 105-MW section of the 210-MW Sarangani Energy Corp. baseload coal-fired power plant in Maasim, Sarangani.

Sarangani Energy’s second 105-MW section is in the advanced stages of construction and is on-track to start its commercial run in 2019.

The Alsons power group plans to start this year the construction of the 105-MW San Ramon Power, Inc. (SRPI) baseload coal-fired power plant in Talisayan, Zamboanga City. The plant is the biggest power project in the Zamboanga Peninsula and is expected to start operating in 2021.

Mr. Alcantara said the company has begun preliminary work on a 15-megawatt run-of-river hydropower project at the Siguil River basin in Maasim, Sarangani. The project’s commercial operation is expected in 2020. 

Alsons unit asks DoE chief to intervene as NGCP continues to ignore request

A UNIT of the Alcantara-led Alsons Consolidated Resources, Inc. has asked the Department of Energy (DoE) secretary to intervene in its request to connect the second phase of its Sarangani power plant to the grid operator’s substation, in a move that it claims to have an impact on three million people in Mindanao.

In a letter to Energy Secretary Alfonso G. Cusi dated Feb. 20, 2018, the chief executive officer of Sarangani Energy Corp. (SEC) accused privately owned National Grid Corporation of the Philippines (NGCP) of abusing its position as system operator for not acting on the power developer’s request.

“NGCP’s inaction on SEC’s request is an abuse of its position as the transmission grid operator and in violation of its mandate as a franchised public utility,” SEC CEO Tirso G. Santillan Jr. said in the letter.

“SEC has been requesting NGCP… that it be allowed to install the necessary facilities in the NGCP Klinan Substation to connect Phase II to the grid. Unfortunately, the request has been pending with NGCP for 15 months already. This has severe consequences not just on SEC but also on its customer distribution utilities who have considered the Phase II supply in their supply projections,” he added.

NGCP did not immediately respond to a request for comment on the issue.

SEC is currently constructing the second 105-megawatt (MW) of its 210-MW circulating fluidized bed coal-fired power plant in Maasim, Sarangani province. It targets to start commercial operations by Jan. 15, 2019.

“In order to meet its timetable, SEC has to ensure that every aspect of Phase II’s project is completed on time, including the completion of the connection to the grid,” Mr. Santillan said.

The SEC official said the timely installation of the necessary facilities at Klinan substation is needed in order to meet the deadline. He noted the necessary assets should be operational by May 15, 2018 to enable SEC to accomplish the commissioning stage of the second phase, including various commercial operation tests.

Mr. Santillan said the request has not been granted “despite our compliance with all applicable rules and regulations and repeated requests for action on the part of NGCP.”

He warned SEC’s customers would suffer “considerable power shortages” if supply from the second unit is delayed.

SEC is contracted to supply a total of 105 MW to Mindanao distribution utilities, namely: Cagayan Electric Power and Light Co., Inc.; Cotabato Electric Cooperative, Inc.; Davao del Sur Electric Cooperative, Inc.; Iligan Light and Power, Inc.; South Cotabato I Electric Cooperative, Inc.; and Zamboanga del Sur I Electric Cooperative, Inc.

Mr. Santillan said NGCP’s “discriminatory treatment” of SEC was in contrast to a past experience involving the company’s first unit where it was able to install similar facilities in the same substation.

“It is noteworthy that NGCP is treating SEC differently from all other generation companies by taking upon itself the installation of assets necessary for the grid connection. As far as SEC knows, generation companies have been advancing the cost of these assets because NGCP refused to provide them, on the ground of lack of capital expenditure allocation. When SEC requested treatment identical as that given to other generation companies, NGCP has refused to do so,” he said.

Should NGCP be allowed to continue disregarding its mandate “to provide open and non-discriminatory access to the grid, Mr. Santillan said it will set a dangerous precedent that will unsettle the entire power industry.”

His letter was furnished to Agnes T. Devanadera, chairperson of the Energy Regulatory Commission, and Melvin A. Matibag, president and chief executive officer of National Transmission Corp.

Ayala-Alcantara joint venture taps Gaisano for Azuela Cove supermarket

DAVAO CITY — Azuela Cove, the joint township project of the Ayala and Alcantara groups, will have a multilevel supermarket to be put up by mall developer DS Gaisano Group, Inc.

“Our plans are moving aggressively forward,” Ayala Land, Inc. (ALI) Assistant Vice-President Enrique B. Manuel, Jr. told BusinessWorld on the sidelines of Saturday’s launch of the company’s second luxury condominium tower within the 25-hectare complex.

Aside from the supermarket, plans are also under way for the construction of a school, a hotel, and another office building.

Mr. Manuel said they are still finalizing the contract with DS Gaisano for the supermarket, which is targeted for completion by end-2019.

“We are still exchanging ideas on plans (for the supermarket),” he said.

The planned academic institution would be an Enderun Colleges, owned by homegrown tycoon Dennis A. Uy. It will be built on a 3,000-square meter area.

Mr. Uy, through his Udenna Corp., last year bought the high-end school, which has its main campus at the Fort Bonifacio Global City in Taguig City. The school offers courses in the hospitality industry and business management.

Mr. Manuel also said that they have started negotiating with a hotel brand, but declined to give the name.

“There is going to be a hotel… and we will start to push the development,” he said.

Meanwhile, several restaurant chains are expected to open within the complex next month, adding to the first operational locator, Cafe Laguna.

A 200-room St. Luke’s Medical Center will also be constructed at the township, which used to be the location of a plywood factory of the Alcantara Group of Companies.

Editha I. Alcantara, director of Alsons Consolidated Resources, Inc., said buyers of the condominium units appreciate the whole development of the Azuela Cove.

“We have partnered with the best, so we and the buyers expect for the best results,” Ms. Alcantara said during the launching event.


...commercial papers = utang Tongue

Alsons to raise P2.5 billion from commercial paper issuance

ALSONS CONSOLIDATED Resources, Inc. (ACR) looks to raise P2.5 billion from the issuance of commercial papers in the next three years, with the first tranche to be used for the construction of its Siguil hydropower plant.

The listed firm filed its application for registration of the commercial papers with the Securities and Exchange Commission last Aug. 3. The first tranche of the issuance will consist of P1.5 billion worth of commercial papers with a tenor of 90 days for Series A, 180 days for Series B, and 360 days for Series C.

The commercial papers will be priced at a discount or at face value, with the discounts ranging from 4.9416% to 5.9416% for Series A, 5.1763% to 6.1763% for Series B, and 5.7161% to 6.7161% for Series C.

The Alcantara-led company has engaged Multinational Investment Bancorporation as sole issue manager, lead arranger, and underwriter.

The commercial papers will be listed at the Philippine Dealing & Exchange Corp.

Proceeds of the offer is estimated to reach around P1.395 billion. ACR said it will use these funds to settle its short-term obligations worth P291.25 million, which are set to mature in the third quarter of 2018.

The balance, worth P1.10 billion, will be for the P3.9-billion run-of-river hydroelectric power plant that the company plans to build along Siguil River in Sarangani province.

“The company plans to use the remaining balance of the proceeds to partially bridge finance the Siguil project’s construction until permanent capital is secured,” it said.

ACR targets to start construction of the 15.1-megawatt power plant by the third quarter of this year, with commercial operations scheduled to commence in 2021.

The company, however, noted it has yet to finalize the disbursement schedule of the funds. With this, it intends to invest the proceeds in short-term marketable securities until the disbursement schedule is finalized.

Local debt watcher Philippine Rating Services Corp. earlier gave the company a PRS A plus rating, indicating that ACR has an above average capacity to meet its financial commitment compared to other local firms, yet it is also more susceptible to adverse changes in circumstances and economic conditions than higher-rated companies.

The rating was also assigned a stable outlook, indicating that it is unlikely to change in the next 12 months.

Incorporated in 1974, ACR is involved mainly in energy, power, and property development. It has three operating power generation subsidiaries, namely Western Mindanao Power Corp., Southern Philippines Power Corp., and Mapalad Power Corp.

ACR grew its net income by 26% to P103.14 million in the first quarter of 2018. Revenues picked up 1.8% to P1.68 billion, due to lower financial charges after it settled some short-term debt and pre-paid a portion of long-term debt. 


...patay Tongue

Alsons swings to net loss in April-June

ALSONS Consolidated Resources, Inc. (ACR) swung to a P76-million net loss attributable to owners of the parent in the second quarter, a reversal of year ago’s net income of P50.47 million.

In a regulatory filing, the Alcantara-led holding firm reported a 6.2% decline in revenues to P1.81 billion in the April to June period from P1.93 billion a year ago.

Revenues from energy fees, which accounted for most of its topline numbers, dropped to P1.80 billion from P1.927 billion previously.

For the semester, ACR posted a net loss of P95.75 million attributable to the owners of the parent firm, reversing last year’s net income of P86.03 million.

Revenues slipped 2.5% to P3.48 billion in the first six months of the year.

ACR’s core businesses, conducted through its various subsidiaries and associates, are grouped into main categories consisting of energy and power, property development, and other investments.


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