AC Energy inks deal on Phinma Energy stake

By Jordeene B. Lagare – February 12, 2019
from The Manila Times

AC Energy Inc., the energy platform of Ayala Corp., has signed an investment agreement with Phinma Corp. on buying the latter’s 26.25-percent stake in subsidiary Phinma Energy Corp.

In separate disclosures on Monday, Ayala Corp. and Phinma Corp. said the deal signed on February 8 covered 1,283,422,198 shares worth P1.7 billion.

This comes exactly a month after both listed firms inked heads of agreement on the transaction, which also involves AC Energy purchasing Phinma parent Philippine Investment Management (Phinma) Inc.’s 24.23-percent interest in Phinma Energy for a combined 51.48-percent stake.

The Ayala-led unit will acquire the total stake via a secondary share sale for approximately P3.42 billion, and also subscribe to 2.632 billion Phinma Energy shares for P1 apiece.

The deal is yet to secure the approval of the Philippine Competition Commission, Securities and Exchange Commission, and the Philippine Stock Exchange; as well as comply with applicable mandatory offer requirements.

Eric Francis, AC Energy president and chief executive officer, told reporters recently that his company was looking at “May, June [or] July in…getting PCC or regulatory approval” and making a “mandatory tender offer, which typically takes 90 days.”

The transaction, AC Energy said in its disclosure, is an “important step” for it to meet its goal of generating 5 gigawatts of renewably energy (RE) by 2025.

It noted that Phinma Energy had “significant operating and developmental renewable energy assets, and its large diesel capacity will complement the scaling-up of” its RE projects.

Phinma Corp. said the deal offered “a timely opportunity for the Phinma Group to harness value from a business [that] it established 50 years ago, and which Phinma believes it has grown to the extent it can.”

It “believes that it can make meaningful expansions in other sectors, such as education and construction materials, and has elected to sell its shares to AC Energy, which is fully committed to this sector,” it added.

The February 8 agreement is the latest signed by the two energy subsidiaries, the first of which was the 2011 deal to build and operate a 244-megawatt coal power plant under the South Luzon Thermal Energy Corp. in Calaca town, Batangas province.

AC Energy has more than $1 billion of invested and committed equity in renewable and thermal energy in the country and the region.

Phinma Energy is into generating and supplying electricity; renewable energy; and resource exploration and development. It has an attributable generation capacity of 472 MW.

Ayala Corp. shares added P2 or 0.22 percent to close at P929 each, while Phinma Energy shares remained flat at P1.32 apiece on Monday.