PCC clears AC Energy purchase of Phinma power business

MANILA, Philippines — AC Energy Inc., the energy platform of Ayala Corp., has clinched the approval of the Philippine Competition Commission (PCC) to acquire the power business of the Phinma Group.

AC Energy inked a deal to buy Phinma Inc.’s and Phinma Corp.’s combined 51.48 percent stake in Phinma Energy Corp.

The shares will be acquired through a purchase of secondary shares for P3.42 billion.

The total transaction value amounts to P6.05 billion.

“We are pleased with the PCC approval. To comply with legal requirements, AC Energy will make a tender offer for other Phinma Energy shareholders who wish to sell their shares. That said, AC Energy will be happy to keep the company listed,” AC Energy president and chief executive officer Eric Francia said.

Also part of the sale is AC Energy’s subscription to around P2.6 billion worth of primary shares of Phinma Energy at par value.

After the subscription, AC Energy will have a total stake of around 68 percent, subject to the conduct of a tender offer for the shares of Phinma Energy’s minority shareholders.

Both parties expect to reach financial close on the transaction upon fulfillment of customary conditions, with PCC approval being one of the key deliverables.

Other regulatory approvals include those from the Securities and Exchange Commission and Philippine Stock Exchange, and compliance with the mandatory tender offer requirements.

Once completed, the transaction will increase AC Energy’s attributable generation capacity by 240 megawatts (MW).

Phinma Energy wholly owns Phinma Power Generation Corp., Phinma Renewable Energy Corp., CIP II Power Corp.,One Subic Power Generation Corp. and One Subic Oil Distribution Corp.

It also owns 60 percent of Phinma Solar Corp., 50.74 percent of Phinma Petroleum and Geothermal Inc., 30.65 percent of Palawan Exploration and Production Corp., 45 percent of South Luzon Thermal Energy Corp. (SLTEC) and 25 percent of Maibarara Geothermal Inc.

AC Energy and Phinma Energy started a partnership in 2011 for the development, construction and operations of a 244-MW net capacity of coal power plant in Calaca, Batangas under SLTEC.

Phinma said the sale is a timely opportunity to harness value from a business which it established 50 years ago and which the group believes it has grown to the extent it can.

This will also allow it to focus more on meaningful expansions in other sectors such as education and construction materials.

For AC Energy, the transaction will increase its attributable generation capacity by 240 megawatts (MW) once completed, making it an important step for AC Energy to achieve five gigawatts (GW) of renewables by 2025.

The acquisition of Phinma Energy will boost its renewable energy (RE) capacity as well as provide necessary support for the intermittency of its RE portfolio.

This as the company has an attributable generation capacity of 472 MW and is the third largest Retail Electricity Supplier, serving 378 MW of customer demand.

The transaction will increase AC Energy’s portfolio for its retail electricity supply business as Phinma Energy is the third largest retail electricity supplier, serving 378 MW of customer demand.

AC Energy, based on its equity interest in power generation businesses, owns approximately 1.7 GW of generation capacity in operations and under construction.

Last year, it generated 2,800 gigawatt-hours (GWH) of energy, of which 48 percent was from renewable sources.