Ayala power unit plans to raise P30 B this year

AC Energy Corp. is eyeing to raise up to P30 billion from its planned capital raising activities this year, which will be used mainly to bankroll various project developments to meet its renewable target of five gigawatts (GW) by 2025.

In a virtual briefing yesterday, ACEN president and CEO Eric Francia said the company would conduct a number of capital raising activities this year following the completion of its stock rights offer (SRO), where it raised nearly P5.4 billion last month.

These include the issuance of shares to an affiliate of Singapore state fund

GIC Private Ltd. within the first quarter, conduct a follow-on offering (FOO) in the middle of the year, and conduct a secondary share to GIC toward the end of the year.

“I expect to raise up to P30 billion from the stock rights offer, private placement, and follow on offering,” Francia said, adding that “that’s the cash that’s going to be available to us and therefore we do have plans of deploying this amount focused on renewable energy projects. ”

Earlier, ACEN’s board approved the investment of GIC affiliate Arran Investment Pte Ltd. through the subscription of four billion primary shares via a private placement and purchase of secondary shares from parent AC Energy and Infrastructure Corp. (ACEIC).

Francia said the private placement of four billion primary shares to Arran is targeted within the first quarter while the secondary share component would “come toward the end of the year.”

“ACEIC is expected to sell additional shares to GIC so that GIC would end up with 17.5 percent ownership stake in ACEN,” he said.

For the FOO, Francia said the company still has no final amount on the size. “We still plan to do that by middle of this year, that’s mostly going to be the issuance of primary shares,” he said.

The Ayala group is looking to complete a third-party study on all its local and international assets, which will give prospective investors an idea on the final terms of ACEIC’s international assets infusion in ACEN, which is expected to take place after the FOO.

Francia said the valuation of the Philippine and international platform, which has expanded significantly over the last 12 months, would be done by FTI Consulting Philippines.

“We would need to refresh the third-party valuation. We’re targeting to complete that within first quarter as well. That would inform the final and updated decision on the international infusion. So that when we do our FOO, prospective investors would have a firm idea already on the final terms of the infusion,” he said.

When all these are completed, ACEN will have enough funding to meet – even exceed – its five GW renewables goal.

“We should be on our way, that would complete the structuring of ACEN to become the unified, integrated platform of the Ayala Group and AC Energy in energy. That would really put us in a strong position to realize our vision which is to exceed five GW and be the largest renewables platform in Southeast Asia,” Francia said.

This year, ACEN expects to double its renewable energy capacity in the country, which is currently around 450 megawatts (MW) of operating and under construction projects.

“We plan to add another 500 MW, hopefully we can more than double it, hopefully we can hit actually 1,000 MW in the Philippines alone by 2021,” Francia said.

“That close to P30 billion of capital to be raised, we’ll be able to fund more than 500 MW of renewables. This is going to represent advanced funding for projects moving forward,” he said.

For its international platform, ACEN has several project opportunities in Australia and India this year, enough for the company to meet half of its 2025 target this year.

Currently, the international platform has over 900 MW. The local and international business has a combined capacity of 1,350 MW.

“We’ve set out a renewable target of five GW by 2025. Given our trajectory, I certainly hope we’ll exceed five GW. We’ll get to halfway mark by this year, between the Philippines and the international platform,” Francia said.

ACEN, the energy platform of Ayala Corp., is one of the fastest growing companies with over $1 billion of invested and committed equity in renewable and thermal in the Philippines and around the region.