AC Energy consolidates Philippines, international platforms

MANILA, Philippines — The Ayala Group‘s energy arm is consolidating its international and Philippine platforms via a property-for-share swap deal valued at P86 billion.

In a disclosure to the Philippine Stock Exchange yesterday, AC Energy Corp. (ACEN), the energy platform of Ayala,  said its board approved the property-for-share swap with AC Energy and Infrastructure Corp. (ACEIC).

Under the deal, ACEN will issue around 16.69 billion shares to ACEIC priced at P5.15 apiece in exchange for property consisting of 100 percent of ACEIC’s shares in AC Energy International Inc.

AC Energy International, formerly called Presage Corp., holds all ACEIC’s international renewable energy assets and investment.

To support the transaction, ACEN tapped FTI Consulting Philippines Inc. to conduct a refreshed fairness opinion and valuation report.

Last year, FTI Consulting’s evaluation showed both ACEN and AC Energy International have a combined value of approximately P97 billion.

Based on the updated valuation from FTI Consulting, AC Energy International is now valued between P69.39 billion and P86.04 billion. It has also valued ACEN between P101.57 billion and P144.63 billion.

With the third-party valuation, the value of the property-for-share swap deal is close to the top end of FTI Consulting’s valuation range.

Earlier, ACEN president and CEO Eric Francia said the company needed a third-party study on all the local and international assets since both platforms have expanded significantly over the last 12 months. The Ayala Group has several projects at various stages of development in Indonesia, Australia, Vietnam, and India.

The Ayala firm will issue 16.69 billion shares from the increase in authorized capital stock from 24.4 billion shares to 48.4 billion shares at P1 per share, a move approved in March 2020 and re-confirmed by the company’s board in a meeting on Thursday.

“The proposed increase in authorized capital stock is meant to enable the implementation of the assets-for-share swap between the company and AC Energy and Infrastructure Corp. (ACEIC) for the latter’s international assets, and provide future capital raising exercises to fund its various greenfield projects and other acquisitions,” the disclosure said.

The company board also approved to increase the number of shares exempt from the pre-emptive right of shareholders for issuance of shares in exchange for property needed for corporate purposes or in payment of previously contracted debt from 16 billion shares to 24 billion shares.

“The proposed increase in the number of shares that are exempt from the pre-emptive right of existing shareholders is meant to implement the property for share swap for the infusion by ACEIC of its international assets into the company,” ACEN said.

The property-for-share swap deal and increase in authorized capital stock are subject to the approval of ACEN’s shareholders, to be sought during the annual stockholders’ meeting on April 19, and of regulators.

Consolidating the international power platform under ACEN is aimed to solidify the Ayala Group’s position in the power sector.

“This transaction will firmly establish the company as Ayala’s energy platform both in the Philippines and around the region,” AC Energy chairman Fernando Zobel de Ayala said earlier.

ACEN  is one of the fastest-growing energy companies with over $1 billion of invested and committed equity in renewable and thermal energy in the Philippines and around the region.

The company aspires to exceed five gigawatts (GW) of attributable capacity, and generate at least 50 percent of energy output from renewables by 2025.