AC Energy plans asset swap, SRO to raise capital for expansion

By Myrna M. Velasco – August 19, 2019, 10:00 PM
from Manila Bulletin

AC Energy Philippines Inc. which stands as the new energy investment growth platform of the Ayala group is planning to undertake a combination of asset swap and stock rights offering (SRO) on targeted cash infusion for expansion projects.

AC Energy President and CEO Eric T. Francia

AC Energy President and CEO Eric T. Francia

“We’re looking at a possible combination of a swap and a stock rights offering because there will be components as well that we’ll need for future expansion,” AC Energy President Eric T. Francia said.

The asset swap, he explained, is linked to the acquisition that the Ayala firm had just completed with listed firm PHINMA Energy Inc. – recently renamed as AC Energy Philippines and will be the company’s new platform for onshore investments in energy.

“Whether we will raise part cash or part asset swap, we’re still trying to finalize the decision for that. We’re currently finalizing the studies and eventual position,” Francia stressed.

It can be recalled that the AC Energy board just recently approved the increase in the authorized capital stock of its PHINMA Energy acquisition to P24.4 billion from currently at P8.4 billion.

“In line with that, we asked for an increase in authorized capital stock which will be approved on September 17 – we will have our stockholders meeting… we asked for additional 16 billion shares. It doesn’t mean that we will issue all of these shares – we oversized it enough so we’ll have flexibility in the future in case we need additional capital raising,” Francia explained.

He further qualified “certainly, we’ll need significant capital raising activity in the near term to pursue our expansion.”

As emphasized, the additional capital will be used for investments in greenfield projects and acquisition of power assets, including part of AC Energy Inc.’s onshore power generation and development assets.”