Ayala energy firm okays $300-M new investments; plans stock offering

Published March 20, 2020, 12:02 AM By Myrna M. Velasco
https://business.mb.com.ph/2020/03/20/ayala-energy-firm-okays-300-m-new-investments-plans-stock-offering/

AC Energy Philippines (ACEPH), which is the domestic energy investment arm of the Ayala group, will be coughing up fresh round of US$300 million worth of investments for two renewable energy projects in Ilocos Norte and Bataan provinces.

In parallel, the board of directors of parent firm AC Energy announced that both its local and international investment platforms will have to undergo “consolidation process” to be concluded via a stock rights offering (SRO) at the local bourse. Relative to that, the company’s board also approved the change of AC Energy Philippines’ name to AC Energy Corporation, along with the increase in its authorized capital stock to P24 billion.

“The ACEPH board of directors approved the infusion of various Philippine assets of AC Energy into ACEPH and subsequently approved a stock rights offering – both of which are undergoing regulatory approvals,” the company said.

AC Energy noted it tapped FTI Consulting Philippines Inc. for the valuation of the targeted additional shares to be issued – and at this stage, the third party valuator set the combined value of Presage (its international investment platform) and ACEPH at P97 billion.

As noted by AC Energy Chairman Fernando Zobel de Ayala, “this transaction will firmly establish the company as Ayala’s energy platform both in the Philippines and around the region,” with him stressing that “we are sensitive to the very difficult period our country is going through.” And despite that, Zobel enthused, “we want to reinforce our strong commitment to invest in much needed energy investments in the Philippines.”

On newly unveiled projects, the company said it will shell out US$200 million for the proposed 160-megawatt Balaoi wind farm project, which shall serve as expansion of its facility in Pagudpud – its joint venture with foreign firm UPC Renewables.

In addition, the Ayala firm has green-lighted US$100 million investment in new technologies and a renewable energy laboratory in Mariveles, Bataan.

It has to be culled that most of the coal-fired power facilities of the Ayala group are sited in Mariveles, Bataan. On the new technology venture, the company has not specifically disclosed yet what installation it shall be setting up next in that site.

The newly approved ventures for its Philippine operations will be in addition to the 120MW and 60MW solar projects in Alaminos, Laguna and Palauig, Zambales, respectively; plus the 150MW first phase of its targeted peaking diesel-fired power facility in Rizal province.

Further, it was specified that AC Energy Philippines will be issuing additional primary shares in favor of parent firm AC Energy – and such shall be carried out “in exchange for property consisting of shares owned by AC Energy in its 100-percent subsidiary Presage Corporation,” which is the international platform for its RE ventures in offshore markets.

The Ayala firm’s executive committee will have to determine the final issue price and the number of shares to be issued.

The issue price and the volume of shares offer shall be “within the fair range of values determined by the third party independent valuator FTI Consulting.”

Once the consolidation and shares issuance transactions are completed, it was indicated that AC Energy will be owning 85-percent of ACEPH. “The transaction is subject to regulatory approvals, and is expected to close within the year,” the company said, noting that this deal “is part of ACEPH’s transformation and restructuring.”

Eric T. Francia, president and CEO of AC Energy, indicated that onward, “the company shall continue to focus on renewables expansion, as we move towards our 2025 goal of reaching 5GW (gigawatts) of renewables capacity.”