AC Energy Philippines, Inc. is subscribing to the shares of Giga Ace 1, Inc. to allow the subsidiary to fund its acquisition of the ownership interest of an equity fund in a wind farm in Ilocos Norte.
In a disclosure to the stock exchange, the Ayala-led company’s arm for local energy projects placed the number of shares involved in the deal at 96,707,235, which will give it a 99.97% of the unit’s outstanding shares.
The shares are valued at about P2.57 billion. The subscription will be paid in cash.
In detail, AC Energy Philippines said it had signed the agreement with issuer Giga Ace 1 to subscribe to the latter’s 75,000 common shares to be issued out of its unissued authorized capital stock.
The agreement includes the subscription of 43,069,625 common shares and 53,562,609 Class A redeemable preferred shares to be issued out of the increase in the subsidiary’s capital. It was signed on Feb. 26, 2020.
The unissued common shares are priced at a total P75,000, while the new common shares are priced at P430,796,260, and the redeemable preferred shares at P2,142,504,360.
AC Energy Philippines said the subscription will be used by the issuer to fund its acquisition of the ownership interest of Philippine Investment Alliance for Infrastructure (PINAI) in Philippine Wind Holdings Corp. (PhilWind).
PINAI is comprised of Government Service Insurance System, Langoer Investments Holding B.V. and Macquarie Infrastructure Holdings (Philippines) Pte Ltd.
PhilWind directly and indirectly owns about 67% of North Luzon Renewables Energy Corp., which owns and operates an 81-megawatt wind farm in Pagudpud, Ilocos Norte.
North Luzon Renewables is a joint venture of AC Energy, Inc., UPC Philippines Hold Co I B.V., Luzon Wind Energy Holdings B.V., and PINAI.
AC Energy Philippines earlier said it had received on Feb. 4, 2020 the decision of the Philippine Competition Commission clearing its acquisition of the shares. It quoted the antitrust watchdog as saying that the deal “will not likely result in substantial lessening of competition.” It bought the shares for P2.7 billion subject to agreed adjustments.
AC Energy Philippines said it would be buying the entire shares of PINAI in PhilWind, and that after the transaction, it will directly and indirectly own 67% of North Luzon Renewables.
North Luzon Renewables is a power generating asset with stable cash flows from feed-in tariff under the Renewable Energy Act.
AC Energy Philippines had said the acquisition supports its “strategic objective to be the growth platform” of the AC Energy group in the country, and helps meet its goal of achieving 2 gigawatt of attributable renewable energy capacity by 2025.
On Thursday, shares in AC Energy Philippines rose 0.48% to close at P2.10 each. — Victor V. Saulon