AYALA-LED AC Energy Corp. is moving to fully acquire ownership of renewable energy (RE) platform UPC\AC Renewables Australia, after announcing that its management has cleared the decision to buy the remaining stake of its joint venture partners in the foreign company.
In a press release on Tuesday, the listed power firm said its board of directors had given the green light for AC Energy’s subsidiary AC Renewables International Pte Ltd. to spend $243.3 million in buying the 52% interest held by its partner UPC Renewables Asia-Pacific Holdings and UPC\AC Renewables Australia’s Chief Executive Officer Anton Rohner.
The two sellers will subsequently subscribe to up to 942 million common shares of AC Energy at a subscription price of P11.32 apiece.
The company said the acquisition is contingent on the fulfillment of conditions, and will depend on consent and regulatory approval, including that of the Foreign Investment Review Board of Australia.
“This transaction marks a strategic pivot for AC Energy, as the company embarks on its first wholly-owned development and operations platform outside of the Philippines,” said Eric T. Francia, AC Energy president and chief executive officer.
“We are excited to scale up investment in our Australia platform, as we expect the country to accelerate its energy transition,” he added.
Established in 2018, UPC\AC Renewables Australia has developed more than 8,000 megawatts (MW) of an RE pipeline spanning New South Wales, Tasmania, Victoria, and South Australia.
It is currently developing a 520-MW solar farm in New England.
In a related development, AC Energy said that its board of directors had approved the company’s commitment to achieve net zero by 2050.
In another disclosure on Tuesday, the firm said its board also cleared the move to fully transition the company’s generation portfolio to RE by 2025, adding that it now has authority to work on an early retirement plan for South Luzon Thermal Energy Corp. (SLTEC).
AC Energy fully owns SLTEC, which runs a 270-MW coal-fired power plant in Calaca, Batangas.
The firm said it is looking at using an energy transition mechanism (ETM) for the plant’s early retirement. The ETM is a funding mechanism that has low cost and long-term financing geared towards early coal retirement, while allowing for the reinvestment of proceeds to enable RE projects.
“We remain committed to AC Energy group’s coal divestment policy. In the case of SLTEC, we will ensure that the divestment process incorporates the just transition approach,” Mr. Francia separately said on Viber.
AC Energy also has the go signal to fully acquire five companies, it said.
“The company will assign 100% of its equity in Palawan 55 Exploration and Production Corp., Bulacan Power Generation Corp., One Subic Power Generation Corp., CIP II Power Corp., and Ingrid 3 Power Corp., valued at P3.39 billion, in exchange for 339 million primary shares to be issued by ACEX (ACE Enexor, Inc.) to the company at a price of P10.00 per share,” the company said.
ACE Enexor is the Ayalas’ oil and gas exploration unit, which is majority-owned by AC Energy.
AC Energy hopes to “spin-off” all its thermal assets by 2025.
In addition, the firm is looking at acquiring the ownership interest of UPC Philippines Wind Co. BV and a certain “Stella Marie L. Sutton” in nine power companies for an aggregate amount of P4.5 billion.
AC Energy plans to issue up to 390 million common shares to the owners, affiliates and partners of UPC Philippines at P11.32 apiece.
AC Energy, the listed energy platform of the Ayala group, has an attributable capacity of around 2,600 MW across the Philippines, Vietnam, Indonesia, India and Australia.
The company aspires to reach 5,000 MW of RE capacity by 2025 as it hopes to become the region’s largest listed renewables platform.
AC Energy shares at the local bourse rose by 10% or P1.08 to finish at P11.88 apiece on Tuesday. — Angelica Y. Yang