AC Energy, Phinma Group finalize P6-B power deal

AC Energy Inc., the energy platform of the Ayala conglomerate, has finalized a deal with the Phinma Group to acquire the latter’s power business for a total of P6 billion.

In separate disclosures yesterday, Ayala Corp. and Phinma Corp. said they signed the investment agreement last Friday for the acquisition of the 51.48 percent stake in Phinma Energy Corp. by AC Energy.

AC Energy will also subscribe to approximately 2.632 billion Phinma Energy primary shares at par value of P1 apiece or P2.63 billion.

In total, the transaction value amounts to P6.05 billion.

With the signing of the agreement, AC Energy will now work on securing regulatory approvals from Philippine Competition Commission, Securities and Exchange Commission and the Philippine Stock Exchange.

Once it obtains regulatory clearances, AC Energy will conduct a tender offer to acquire shares of all Phinma Energy shareholders.

AC Energy president and CEO Eric Francia said they are looking at the middle of the year to get the financial close for the acquisition.

“We’re probably looking at middle of the year, around May, June, July, in terms of getting PCC regulatory approval and then we’ll make the mandatory tender offer,” he said.

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

It 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 SLTEC and 25 percent of Maibarara Geothermal Inc.

AC Energy said the acquisition is an important step to achieving its target of 5,000 MW of renewables by 2025.

The transaction will also increase its 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 gigawatthours (GWH) of energy, of which 48 percent was from renewable sources.