AC Energy Inc., a unit of conglomerate Ayala Corp., signed with Phinma Corp. and Philippine Investment Management Inc. an agreement on Feb. 8 to acquire a combined 68.46-percent stake in Phinma Energy Corp. P6.052 billion.
AC Energy said in a disclosure to the stock exchange it signed the investment agreement to purchase the combined 51.48-percent stake of Phinma and PHI in PHEN through a secondary share sale for approximately P3.42 billion, based on the valuation date as of December 31, 2018.
AC Energy will subscribe to approximately 2.632 billion PHEN primary shares equivalent to a 26.25-percent stake at a par value of P1 apiece.
“The transaction will increase AC Energy’s attributable generation capacity by 240 MW and will increase its portfolio for its retail electricity supply business,” parent Ayala Corp. said in its disclosure.
“This transaction is an important step for AC Energy to achieve 5 gigawatts of renewables by 2025. The Phinma Energy platform has significant operating and developmental renewable energy assets, and its large diesel capacity will complement the scaling up of AC Energy’s renewable projects,” it said.
The price consideration is based on an implied equity value of P6.65 billion, subject to adjustments.
The consideration was determined after an evaluation of several offers received by PHEN’s parent company, Philippine Investment Management Inc., assisted by its financial adviser, ING Philippines.
The sale will have to go through required regulatory approvals from the Philippine Competition Commission, Securities and Exchange Commission and the Philippine Stock Exchange.
AC Energy will also have to conduct a mandatory tender offer to acquire the shares of all PHEN shareholders. The deal will require the consent of the creditors of PHEN, Phinma and PHI.
“PHI and Phinma will cause PHN to approve the issuance of 2,632,000,000 new PHEN shares at par,” Phinma said in a separate disclosure.
Phinma plans to use proceeds from the sale “to focus investments in other sectors such as education and construction materials as opportunities arise.”
Phinma earlier said the sale to AC Energy was a timely opportunity for the group to harness value from a business which it established 50 years ago “and which Phinma believes it has grown to the extent it can.”