ACEN board approves P30-B stock rights offering

ACEN [ACEN 2.58, down 7.9%; 866% avgVol] [link], the Zobel Family’s renewable energy holding company, announced that its board of directors approved a plan to sell up to P30 billion worth of primary common shares, at a minimum per-share price of P2.30, through a stock rights offering (SRO). The tentative plan has the support of ACEN’s principal shareholders, AC Energy and Infrastructure Corporation and Arran Investment Pte Ltd, as both intend to purchase their pro rata shares. All the finer details of the offering, including the offering’s final size and pricing, will be disclosed at the appropriate time and reflected in the company’s prospectus. No timeline or dates were provided.

MB bottom-line: This is a rather large SRO. Depending on the final terms and pricing, the details provided imply ACEN’s willingness to issue around 13 billion new common shares through this transaction, which would result in a 32% increase in the company’s outstanding shares. Now, this is an SRO, so it’s not automatically dilutive, but this is an opportunity for the principal shareholders to take back some of the public float by strong-arming weaker shareholders who may be unwilling to put more money into the pot to protect their positions. Investors didn’t seem to like the news, with the stock trading down nearly 8% on the day. ACEN’s stock has been on a long-term downtrend since late 2021, and it’s down 80% since that time. ACEN’s price has dumped to September 2020 levels.

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