SYNERGY Grid & Development Phils., Inc. is set to gain 9.241% direct control over the country’s privately owned power transmission operator, National Grid Corporation of the Philippines (NGCP), apart from its indirect ownership stake.
Synergy Grid is subscribing to 203,630,000 nonvoting preferred shares of NGCP, which will result in an increase in the latter’s capitalization.
At P60.10 per share, the total subscription amounting to about P12.24 billion, will be paid in cash coming from the proceeds of the follow-on offering. The amount will be used for NGCP’s capital expenditure programs and related expenses.
“This amount will be a huge boost to fund NGCP’s capital expenditure, a huge chunk of which is on new transmission projects for the improvement, upgrading, and expansion of the country’s power grid,” said Synergy Grid Chairman Henry T. Sy, Jr., who is also on NGCP’s board.
Through holding companies, Synergy Grid indirectly controls 60% of the outstanding capital stock of NGCP, which is its sole operating asset. It has an effective equity interest of 40.2% consisting of common shares.
It said the parties agreed on the subscription price based on, among other considerations, the fair value of NGCP’s shares. Synergy Grid is to pay around P3.06 billion in cash on the subscription agreement’s execution date.
The remaining 75% or P9.18 billion will be paid within 10 days from the approval of the Securities and Exchange Commission of NGCP’s increase in authorized capital stock.
NGCP holds the sole and exclusive concession and franchise for the operation of the country’s power transmission network, which links power generators and distribution utilities to deliver electricity nationwide.
Synergy Grid said NGCP in the next 13 years is committed to invest around P440 billion across 211 projects to support the growing electricity demand in the Philippines.
“Our investors who chose to partner with us at SGP (Synergy Grid’s stock symbol) are instrumental in ensuring that NGCP’s projects in the pipeline will come into fruition and play a significant part in the country’s economic development,” Robert G. Coyiuto, Jr., Synergy Grid vice-chairman.