AC Energy Holdings Inc., a wholly-owned unit of conglomerate Ayala Corp., and Star Energy Geothermal Holdings Pte. Ltd. have decided to transfer their interest in the consortium acquiring Chevron’s geothermal assets in the Philippines to the SM Group.
Ayala disclosed to the Philippine Stock Exchange on Monday that AC Energy signed definitive agreements to transfer 99 percent of its consortium interests in ACEHI-STAR Holdings Inc. to AllFirst Equity Holdings Inc. of the SM Group.
AllFirst is Chevron’s current partner, and directly holds a 60 percent ownership interest in Philippine Geothermal Production Co., or PGPC.
ACEHI-STAR is the special purpose company that signed a share sale and purchase agreement with Chevron in December 2016, to acquire Chevron’s Philippine geothermal assets subject to the satisfaction of certain conditions, including the approval of the Philippine Competition Commission.
Credit Suisse acted as the sole financial advisor to the consortium of AC Energy and Star Energy Holdings.
AC Energy said the consortium sold its interest to the SM Group for two reasons.
“Our primary goal was to win the Indonesian geothermal assets. The Philippines asset is not as strategic since it is limited to steam field, and a minority position,” the company said.
AC Energy, Star Energy Group Holdings Pte. Ltd., Star Energy Geothermal Pte. Ltd., and Electricity Generating Public Co. Ltd. acquired Chevron’s Indonesia assets and operations, which include the Darajat and Salak geothermal fields in West Java, Indonesia, with a combined capacity of 637 MW of steam and power in April.
“Our stance has always been to respect Allfirst’s preemptive right. While Allfirst and Chevron were not able to consummate their preemption process, this transaction enables the desired outcome,” AC Energy said.
Chevron assets in the Philippines includes a 40 percent equity interest in PGPC, which operates the Tiwi and Mak-Ban geothermal fields in Southern Luzon and supplies steam to power plants with a combined name plate capacity of around 700 MW.
AC Energy International Holdings Pte Ltd., an affiliate of AC Energy, meanwhile, signed a funding arrangement with UPC Renewables Asia Pacific Holdings Ltd. and UPC Renewables Asia Ltd. to develop small island power projects in Indonesia.
AC Energy International agreed to provide funding for the development of power generation projects with sub-50 MW capacities under the terms of the agreement.
AC Energy said it would also have accompanying rights to participate in further construction funding of other Indonesian renewable energy projects.
“This agreement will broaden AC Energy’s participation in the Indonesian market, as well as deepen our strategic partnership with UPC Renewables” said AC Energy president John Eric Francia in a separate statement.
“Indonesia has huge unserved demand especially in smaller islands, which this initiative aims to address,” he said.