AC ENERGY Corp. (ACEN) said on Monday that it would continue to explore other means to unload of its diesel assets and its ownership in a petroleum exploration firm after it decided to cancel a property-for-share swap deal that would have realized the transition.

In a disclosure on Monday, the Ayala-led energy platform said the swap agreement between ACEN and its unit ACE Enexor, Inc. had been canceled “due to unfavorable market conditions.”

“Transaction would have required a follow-on offering and a stock rights offering, which will be challenging to execute under current market conditions,” it said.

ACEN said it remains committed to attain 100% renewable energy generation by 2025.

On Friday, ACEN disclosed that its board of directors and that of ACE Enexor had approved the cancellation of the property-for-share swap between the two companies.

The decision comes months after the two approved Oct. 18, 2021 the swap deal that involved the transfer to ACE Enexor by ACEN of its direct interest in Palawan 55 Exploration & Production Corp., which in turn has an ownership interest in Service Contract 55 (SC 55), an exploration block near the West Philippine Sea.

The swap also involved the transfer of ACEN’s ownership interests in various diesel assets, namely: Bulacan Power Generation Corp., CIP II Power Corp., and One Subic Power Generation Corp.

It would also have transferred ACEN’s interest in Ingrid3 Power Corp., which is a special purpose vehicle for a potential gas power generation project.

In exchange for the assets, ACE Enexor was to issue 339,076,058 primary shares to ACEN.

ACEN said that during the past few months, the management teams of the two companies “have exerted diligent and good faith efforts in planning and mapping out the implementation of the various steps needed to comply with the foregoing requirements.”

“However, this has proven to be very challenging given the economic uncertainties due to the continuing pandemic and exacerbated by the Ukraine-Russia conflict,” it added.

The company said ACE Enexor would continue to explore “relevant opportunities in energy transition space, including the opportunities under [SC 55] as management continues to look for the right partner for this endeavor.”

ACE Enexor is majority owned by ACEN. Its primary business is the exploration and production of crude oil and natural gas through interests in petroleum contracts.

ACEN has about 3,800 megawatts (MW) of attributable capacity in the Philippines, Vietnam, Indonesia, India, and Australia. It aspires to be the largest listed renewables platform in Southeast Asia as it aims to reach 5,000 MW in renewables capacity by 2025.

As of last count, the company’s renewable share of capacity is close to 90%, which is said to be among the highest in the region. ACEN is committed to achieve net zero greenhouse gas emissions by 2050.

ACEN shares closed higher by 2.81% to P7.31 each, while those of ACE fell by 18.68% to P10.36 apiece. — Victor V. Saulon