Shareholders of SM Investments Corp. approved the conglomerate’s venture into renewable energy.
SM Investments said in a disclosure to the stock exchange Thursday shareholders approved the merger of the company with Allfirst Equity Holdings Inc., the holding company of Philippine Geothermal Production Co., which in turn operates the Tiwi and Mak-Ban steam fields.
SM Investments will be the surviving entity under the merger plan.
“The acquisition is in line with group’s strong commitment to sustainability and in promoting renewable energy in the Philippines,” the conglomerate said.
The merger will enable SM Investments to invest directly in clean renewable energy-related production and create value for minority shareholders.
SM Investments plans to issue 43 common shares in exchange for one Allfirst common share or a total of 21.5 million SM Investments common shares, subject to a fairness opinion by an independent appraiser.
Out of the 21.5 million SM Investments common shares, four million shares will be issued by SM Investments to itself, and be treated as treasury shares, while 17.4 million shares will be issued to the other shareholders of Allfirst Equity. SM Investments owns a 19-percent stake in Allfirst Equity prior to the deal.
The merger is expected to completed by the third quarter of 2022.
PGPC is the operator of Tiwi, the first commercial-scale geothermal steam field development in Southeast Asia. It is located in Albay while Mak-Ban operates in Laguna and Batangas.
Both fields are in operation since 1979. They generate geothermal steam sufficient to produce approximately 300 megawatts of electricity.
The geothermal power plants are being operated separately by Aboitiz Power Corp.
In addition to its two producing steam fields, PGPC has several other greenfield concession areas for geothermal steam production which it plans to develop later.