Phinma Energy hikes stake in unit ahead of AC Energy takeover

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PHINMA Energy Corp. has signed on Thursday an agreement to acquire the stake of two affiliate firms in the former’s subsidiary Phinma Petroleum and Geothermal, Inc. (PPG), the listed companies told the stock exchange yesterday.

Phinma Energy will buy the shares at P2.44 each from Phinma Corp. (PHN) and Phinma Investment Management (Phinma), Inc. (PHI), giving it a total 75.92% stake in PPG, a listed company engaged in crude oil and natural gas exploration.

The agreement covers the sale of PHI’s 30,481,111 and PHN’s 32,481,317 shares, which represent 25.18% of PPG’s total outstanding stock. Before the sale of the 62,962,428 shares, Phinma Energy held 50.735% or 126,838,679 common shares.

As disclosed on Tuesday, Phinma Energy will be making a voluntary tender offer for the remaining 59,208,851 common shares of PPG, representing approximately 23.684% of the latter’s total issued and outstanding common stock other than those held by Phinma Power Generation Corp., a 100%-owned corporation of the bidder.

The disclosure is an update of Phinma Energy’s disclosure last week after a board meeting on May 9 authorizing several corporate actions, including the authority to negotiate the purchase of PHN and PHI’s stake in PPG, which has interests in petroleum contracts and through holdings in resource development companies with interests in petroleum contracts.

The board also authorized the issuance of 2.632 million primary shares to AC Energy, Inc. at P1.00 per share. It also consented to the assignment of a management contract from PHI to AC Energy under the same terms and conditions.

These moves are the recent development in the proposed acquisition by AC Energy of Phinma Energy.

On Jan. 9, AC Energy announced that it was taking control of Phinma Energy through a “mutually strategic agreement” that gives the Ayala-led company a 51.48% stake in the listed energy company for P3.42 billion.

The two groups said the Ayala’s energy platform is to acquire the combined stake of PHN and its parent PHI in Phinma Energy subject to regulatory approvals.

Jaime Augusto Zobel de Ayala, chairman and chief executive of Ayala Corp., described the Phinma group as “one of our early partners when Ayala was new to the power sector.” He said the partnership had prospered during the past eight years and that he welcomed the opportunity for integration as AC Energy boosts its presence in the power generation sector.

The agreement calls for the sale by listed holding firm PHN of its 1,283,422,198 shares or 26.25% in Phinma Energy for P1,745,454,189.28 based on the unit’s implied 100% equity value of P6,650,093,893.92. The shares will be sold through the stock exchange. PHI will also sell its 25.23% interest in the energy subsidiary.

PHN and its parent will then cause Phinma Energy to approve the issuance of 2.632 million in new shares, to which AC Energy will subscribe. The subscription will result in a total stake for AC Energy of around 68%, subject to the conduct of a tender offer for the shares of Phinma Energy’s minority shareholders.

The groups said the valuation date was as of Dec. 31, 2018 and is subject to adjustments. AC Energy announced on April 15 the receipt of the Philippine Competition Commission’s approval of the planned acquisition.

On Thursday, shares in Phinma Energy fell by 7.48% to close at P1.98. PPG shares were also down by 0.54% at P3.67 each. — Victor V. Saulon