Phinma exits energy business

THE Phinma group signed an investment agreement to sell its stake in the energy sector to AC Energy, Inc., marking the former’s departure from power generation and retail electricity and the Ayala-led company’s growing prominence in the said businesses.

“AC Energy, Phinma Corporation (PHN), Philippine Investment Management (Phinma), Inc. (PHI), signed the Investment Agreement on February 8, 2019 for AC Energy’s acquisition of PHN and PHI’s combined 51.48% stake in (Phinma Energy Corp.) via a secondary share sale for approximately P3.42 billion, based on the valuation date of December 31, 2018 and subject to adjustments,” Ayala Corp. said in a disclosure on Monday.

The company said AC Energy will also subscribe to approximately 2.632 billion primary shares of Phinma Energy at a par value of P1 per share.

Separately, Phinma Corp. said the move was 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.”

It “believes that it can make meaningful expansions in other sectors such as education and construction materials, and has elected to sell its shares to AC Energy which is fully committed to this sector.” AC Energy is its partner in South Luzon Thermal Energy Corp.

Ayala Corp. said the deal brings AC Energy a step closer to achieving 5 gigawatts (GW) 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,” the listed conglomerate said.

AC Energy owns around 1.7 gigawatts of generation capacity in operation and under construction based on its equity interest in power generation businesses. It generated 2,800 GW-hours of energy last year, of which 48% was from renewable sources, the company said.

Phinma Energy has an attributable generation capacity of 472 megawatts (MW). It is the third-largest stand-alone retail electricity supplier serving 378 MW of customer demand.

Sought to comment on the deal, 2TradeAsia.com earlier said two possibilities could happen — for AC Energy to proceed with a tender offer, and for Phinma Energy to be merged with the Ayala company.

The online arm of F. Yap Securities, Inc. said the contribution of AC Energy to parent Ayala Corp. as of the third quarter of 2018 was around 7%. It said with the consolidation of equitized earnings from Phinma Energy, “that would still be the same at around 7% (assuming a merger is undertaken here).”

On Monday, shares in Phinma Energy were unchanged at P1.32 each, while those of PPG fell by 4.11%% to P3.50 each. Phinma Corp. closed at P9.36 apiece, or higher by 4.12%. —