Singaporean wealth fund to invest P20-B in Ayala energy firm

Published November 12, 2020, 1:56 PM

by Myrna M. Velasco

An affiliate of Singapore government-led investment firm GIC Private Limited (GIC) is targeting to inject P20 billion worth of investment into AC Energy (ACEN), the energy company of the Ayala group.

AC Energy disclosed to the Philippine Stock Exchange (PSE) that its board of directors approved the investment proposal of GIC’s affiliate firm Arran Investment Pte. Ltd. –which in particular will allow the latter to corner 17.5-percent stake in the Ayala-owned energy firm.

The transaction document for this tie-up with the affiliate of the state-managed wealth fund of Singapore is to be signed in November this year. Acting as financial advisor to the Ayala group on this merger and acquisition (M&A) deal is AlphaPrimus Advisors Inc.

“To implement the investment, ACEN, GIC’s affiliate and AC Energy, will sign an Investment Agreement as well as Shareholders’ Agreement that will document the rights and obligations of the GIC affiliate as an investor in ACEN,” the Ayala firm has stipulated.

The shares’ acquisition, as stated, will be done through AC Energy’s stock rights offering (SRO) and follow-on offering (FOO), and shall entail the subscription of the GIC affiliate to 4.0 billion primary shares via a private placement; and the purchase of secondary shares from AC Energy.

The transaction, it was noted, “will be at a price of P2.97 per share on a post-SRO basis and is subject to agreed price adjustments.”

AC Energy said the pricing carries a premium of 25-percent vis-à-vis the approved SRO price by the company’s board of directors; which had been pegged at P2.37 per share.

“The terms of ACEN’s stock rights offering, including the price offer, are subject to approval by the Securities and Exchange Commission,” the Ayala energy firm has specified.

AC Energy further stated that it “will not participate in the initial round of SRO to provide maximum availability to minority shareholders.” The Ayala firm likewise noted that the provided summary computation of the TERP (theoretical ex-rights price) or the market price of the company is seen on a par using the 30-day VWAP (volume weighted average price) of P3.51 per share.

The company emphasized that “the completion of the subscription by the GIC affiliate to primary shares is subject to definitive documentation being signed by the parties and satisfaction of agreed conditions precedent,” which shall include the completion of the stock rights offering of AC Energy.

The SRO, in particular, is targeted for completion in the first quarter of 2021, including the requisite regulatory approvals.

Correspondingly, the transaction closure for the GIC investment will also need to go through “definitive documentation being signed by the parties,” plus completing the specified conditions that shall include “the infusion of AC Energy of its international business into ACEN by way of a property for shares swap,” which is seen concretized by the third quarter of next year.