EGCO Group Completes Transaction to Sell Its Stake in Masinloc Power Plant For $850 Million

Hunton Andrew Kurth’s Bangkok office assisted Electricity Generating Public Company Limited (SET:EGCO), the first independent power producer in Thailand established in 1992 by Electricity Generating Authority of Thailand (EGAT), in the divestment of its 49 percent equity stake, held by its wholly-owned subsidiary Gen Plus B.V., in Masin-AES Pte. Ltd. (MAPL) to SMC Global Power Holdings Corp, a power arm of conglomerate San Miguel Corp. (SMC) for US$ 850 million.

MAPL is a Singapore private limited company in which its equity stakes were held by AES Phil Investment Pte. Ltd., a business arm of American energy giant AES Corporation (AES), at 51 percent and Gen Plus B.V. at 49 percent. AES also divested its full equity interest in MAPL to SMC in a concurrent sale. The total enterprise value of the transaction is US$ 2.4 billion which has been reported as one of the largest deals in the Philippines’ corporate history.

MAPL is the indirect owner of Masinloc Power Partners Co. Ltd., the operating company of the Masinloc coal-fired power plant comprising two units of 315 MW (gross) each, a 335 MW expansion project (Unit 3) which is currently under construction and two battery energy storage facilities in the Philippines.

As lead counsel, our team assisted EGCO in the negotiation and documentation of the share purchase agreement and related documents together with counsel for the AES seller, King & Spalding, and counsel for the SMC purchaser, Latham & Watkins. Definitive documents were executed on 17 December 2017 and the transaction was completed on 20 March 2018. Our legacy Hunton & Williams team was led by partners Edward B. Koehler and Chumbhot Plangtrakul along with energy associate Christopher Huong.

The transaction also involved ING Bank N.V. as the financial advisor of EGCO, Morgan Stanley Asia (Singapore) Pte. Ltd. as the financial advisor of Masin-AES Pte. Ltd. and Merrill Lynch (Singapore) Pte. Ltd. as the investment banker of SMC Global Power Holdings Corp.