Singapore firm to take 17.5% of Ayala energy arm

DEAL depends on whether AC Energy is able to infuse its international business into ACEN. — ACENERGY.COM.PH

ARRAN Investment Pte. Ltd., an affiliate of Singapore-based GIC Pte. Ltd., is set to acquire an ownership stake of 17.5% in AC Energy Philippines, Inc. for P20 billion, Ayala Corp. (AC) said on Monday.

In a press release, the listed conglomerate said the Ayala energy arm and the latter’s parent firm AC Energy and Infrastructure Corp. (ACEIC) inked the investment agreement with Arran Investment on Dec. 30.

The infusion was previously approved by the unit’s board of directors on Nov. 11.

“The investment will be implemented through a combination of subscription to four billion primary shares (via a private placement) and purchase of secondary shares from AC Energy,” Ayala Corp. said.

The firm added that Arran Investment’s subscription to the primary shares of AC Energy Philippines, or ACEN, will be completed if certain agreed conditions will take place. These conditions include ACEN’s stock rights offering in the first quarter of 2021, and regulatory approvals.

Ayala Corp. said the GIC affiliate’s purchase of AC Energy’s secondary shares would depend on regulatory approvals; and whether AC Energy is able to infuse its international business into ACEN through a “property for shares swap.”

The swap is projected to take place in the third quarter this year.

This development comes after ACEN President and Chief Executive Officer Eric T. Francia in November announced a corporate transformation and restructuring plan that involves the moving of ownership shares to three stakeholders, including Arran Investment and its parent company GIC.

Two months ago, Mr. Francia said that ACEN would need up to $2 billion to surpass its goal of achieving 5 gigawatts of installed energy capacity, with half coming from renewables.

In a previous briefing, the ACEN chief told reporters that AC Energy’s stake would go down to around 65%, with Singapore-based GIC holding 17.5% and the public owning 18%.

Mr. Francia further discussed in detail the company’s corporate restructuring in five steps, which include: a stock rights offering scheduled in the first quarter this year; GIC’s private placement of 4 billion shares by the end of the second quarter; a follow-on public offering at the stock market; and the infusion of the international energy assets the sale of secondary shares to GIC from ACEIC.

ACEIC was previously known as AC Energy, Inc. until the corporate regulator approved of the name change. This came months after Ayala Corp. consolidated its energy, water, transport and logistic firms, which were collectively placed under AC Energy.

Shares in Ayala Corp. on Monday improved 1.09% to close at P836 apiece. Meanwhile, shares in ACEN climbed 13.33% to finish at P10.20 each. — Angelica Y. Yang