Singapore’s GIC formalizes 17.5% equity acquisition in AC Energy

Arran Investment Pte. Ltd., an affiliate of Singapore’s sovereign wealth fund GIC Private Limited, has formalized its 17.5-percent equity acquisition in AC Energy Philippines Inc. (ACEN), a deal which primarily covered P20 billion private placement as part of the ownership take.

GIC’s entry into AC Energy, the energy investment arm of the Ayala group, was sealed through the signing of investment agreement on December 30, 2020, as disclosed by the latter to the Philippine Stock Exchange.

The pact was inked between the GIC affiliate company and AC Energy, along with its parent firm AC Energy Infrastructure Corporation. Tapped as financial advisor to AC Energy for the transaction was AlphaPrimus Advisors.

The P20 billion private placement to and the secondary shares purchase of GIC from the Ayala energy firm secured the approval of the ACEN board of directors on November 11 last year.

According to the Ayala company, the GIC investment “will be implemented through a combination of subscription to 4.0 billion primary shares via private placement and purchase of secondary shares from AC Energy.”

ACEN similarly emphasized “the completion of the subscription by the GIC affiliate to primary shares is subject to the satisfaction of agreed conditions precedent,” which include the conclusion of AC Energy’s stock rights offering (SRO) as slated in February this year.

The Ayala company further indicated that GIC’s purchase of secondary shares shall be concluded following “the completion of the infusion by AC Energy of its international business into ACEN by way of a property for shares swap” -- and that particular undertaking is targeted by third quarter of 2021.

After fulfillment of the firmed up conditions and as agreed upon by the parties, the Ayala firm noted that requisite regulatory approvals will have to be secured for the transactions.

With the shares purchase of the GIC affiliate company, the effective ownership of the Ayala parent firm in AC Energy will be reduced to the level of around 64 percent; from currently at 81-percent. The rest of the shares are held by the public.

The energy investment platform of the Ayala group is targeting aggregate capacity of 5,000 megawatts by year 2025 – for various projects that it has programmed with partners in the Philippines and at its preferred offshore markets.

The company’s investment focus has been on renewable energy (RE) installations – primarily solar and wind farm developments. Within this year, the company is anticipating that its RE capacity will already rise to 2,500MW, which is essentially half of its 2025 target.