Ayala energy firm inks new subscription deal with subsidiary

Published October 22, 2020, 1:17 PM

by Myrna M. Velasco

Ayala-owned AC Energy Philippines (ACEN) has executed a new subscription agreement with subsidiary Ingrid Power Holdings Inc. for the parent firm to purchase specified number of shares; then the proceeds of that transaction will bankroll the first phase of the latter’s 300-megawatt Pililla diesel-fired power project in Rizal province.

In a disclosure to the Philippine Stock Exchange (PSE), it was stated that ACEN will subscribe to 50,000 Class A common shares; and 5,651,000 Class A redeemable preferred shares of Ingrid Power.

The new subscription agreement that was sealed came with a deed of assignment – and that effectively superseded the subscription deal that the parties had cemented December last year.

“The subscription will be used to fund initial works for the construction of the Ingrid plant,” the Ayala firm has emphasized.

The power facility will have two phases – and it will be constructed at 150MW capacity each. The construction of the first phase was in the first quarter of this year.

Ingrid Power is among the subsidiaries that AC Energy had acquired in a property share swap last year – and this is currently undergoing array of regulatory approvals.

The other properties that had been covered by the share swap had been project corporate vehicles AC Energy Development Inc., Monte Solar Energy Inc., South Luzon Thermal Energy Corporation, Philippine Wind Holdings Inc., ACTA Power Corporation, Moorland Philippines Holdings Inc., Manapla Sun Power Development Corporation, Viage Corporation and NorthWind Power Development Corporation.

The Ayala company just recently indicated that it is seeking the approval of the Bureau of Internal Revenue (BIR) on its request for a tax-free exchange on the share swap deal.

The swap covered 6,185,182,288 shares that had been issued to parent firm ACEI by the group’s domestic energy investment arm ACEPH.

The Ayala firm said the issued shares had not been listed at the PSE yet, but it already secured the approval of the Securities and Exchange Commission (SEC) last June on ACEI’s bid to hike its authorized capital stock to P24.4 billion from previously at P8.4 billion, a decision linked to the share swap.

It was in November last year when ACEI executed a deed of assignment with subsidiary ACEPH, which is the energy investment unit of the conglomerate and it also became the transferee-company of the assets that the Ayala firm had acquired from PHINMA Energy Corporation of the Del Rosario group.

As stipulated in the legal documents previously submitted to the PSE, “AC Energy offered to transfer and convey to ACEPH all its rights to and interest in the properties in exchange for and in payment of AC Energy’s subscription to common shares of stock of ACEPH.”

It was further stated that ACEPH “is willing to accept the properties and issue the corresponding number of common shares of stock” – as specified in the transaction documents.

Schedule 1 of subscription for the 6,185,182,288 common shares had been valued at P2.37 per share or for a total transaction value of P14.658 billion.

Prior to the share swap, AC Energy owned 66.34-percent of the outstanding capital stock of ACEPH – but upon completion of the transaction, the parent firm will already own 81.51-percent of AC Energy Philippines.