Ayala energy arm embarks on $2-B transformation

AYALA-LED AC Energy Philippines, Inc. will need up to $2 billion to exceed its 2025 target 5-gigawatt of installed energy capacity, which will also see the completion of its corporate transformation and restructuring, its top official said on Thursday.

“We estimate that we will be requiring around $1.8 [billion] to $2 billion of equity to help realize that vision,” Eric T. Francia, the company’s president and chief executive officer, said in a virtual media briefing.

“We already have lined up the sources of that capital requirement, that equity requirement, which is close to $2 billion,” he added.

Mr. Francia said AC Energy Philippines — or ACEN to differentiate it from its parent firm AC Energy, Inc. — will become the Ayalas’ integrated platform in the energy sector.

ACEN now houses the group’s local thermal and renewable energy investments ahead of the infusion of projects in Australia, India, and Vietnam and other parts of the region. Its parent, AC Energy, will become AC Energy and Infrastructure Corp. (ACEIC). AC Energy currently owns around 81% of ACEN.

“But that shareholding will move around over the next couple years [because of the] corporate restructuring that’s happening in ACEN,” Mr. Francia said.

Mr. Francia said by the end of next year, AC Energy’s stake would go down to around 65%, with Singapore-based GIC Pte. Ltd. holding 17.5%, and the public owning 18%. The board of ACEN last week approved the proposal of GIC affiliate Arran Investment Pte. Ltd. to invest around P20 billion for a 17.5% ownership stake.

“So basically, we’re five steps away from the completion of the restructuring,” Mr. Francia said.

The five steps will start with a stock rights offering in the first quarter next year, the GIC private placement of 4 billion shares by the end of the second quarter, a follow-on public offering at the stock market soon after, then the infusion of the international energy assets, and finally the sale of the secondary shares from ACEIC to GIC.

“At the end of all that, ACEN would have raised $500 million to $600 million of additional cash for growth capital to add to the $700 million of unappropriated cash or cash reserves to really fuel the 2025 plan,” Mr. Francia said.

The 2025 plan is to exceed 5,000 megawatts, or 5 gigawatts, of attributable capacity and generate at least 50% of energy from renewables. — A. Y. Yang