AC Energy-Phinma deal approval seen by mid-2019

AC Energy Inc. expects to secure by mid-2019 regulatory approval for its acquisition of a 51.48-percent stake in Phinma Energy Corp. for P3.42 billion, which it first disclosed in January.

Eric Francia, president and chief executive officer of the power arm of listed Ayala Corp., told reporters on Monday that his company was looking at “May, June [or] July in…getting the PCC (Philippine Competition Commission) or regulatory approval” and making a “mandatory tender offer, which typically takes 90 days.”

All parties expect to sign the definitive documents “within the next few days” and will lodge their application for PCC approval afterward, he said.

The anti-trust body is mandated by Republic Act 10667, or the Philippine Competition Act of 2015, to review mergers and acquisitions that meet the P1-billion threshold to ensure that these deals would not harm the interest of consumers.

Anti-trust regulators normally take between 60 and 90 days to decide on such transactions, according to Francia.

The deal is dependent the outcome of the tender offer, which the AC Energy chief said his firm would wait for “before we determine our specific strategies or decisions.”

In its disclosure last month, the Ayala-led power unit said it was purchasing the stake through a secondary share sale, and that it would buy about 2.632 billion Phinma Energy primary shares at par value.

It explained that this stake — aimed at increasing its presence in the power sector — was made up of 1,283,422,198 shares worth P1.7 billion representing Phinma Corp.’s 26.25-percent interest in Phinma Energy; and the 24.23-percent interest of Philippine Investment Management (Phinma) Inc., the former’s parent.

The transaction is yet to be approved not only by the PCC, but also the Securities and Exchange Commission, the Philippine Stock Exchange, and the creditors of the three Phinma firms.

AC Energy has more than $1 billion of invested and committed equity in renewable and thermal energy in the country and arund the region. It aims to exceed 5 gigawatts (GW) of RE capacity by 2025.

Phinma Energy is into generating and supplying electricity; renewable energy; and resource exploration and development. It has an attributable generation capacity of 472 megawatts (MW).

Shares of AC Energy dropped P8.50 or 0.91 percent to end at P927 each, while those of Phinma Energy shed 2 centavos or 1.49 percent to close at P1.36 apiece on Wednesday.