Conglomerate SM Investments Corp. (SMIC) said Tuesday that it has received approval from the Securities and Exchange Commission (SEC) to acquire the remaining stake it does not own from the company operating the steam field at the Tiwi geothermal power plant in Bicol.
SMIC acquired the 81% stake in Allfirst Equity Holdings Inc., the holding company of Philippine Geothermal Production Co. Inc. (PGPC), for £ 15.76 billion.
The transaction will result in the issuance of 17.44 million new shares to the sellers, mainly the Sy brothers, equivalent to 1.4 percent of the outstanding shares in SMIC.
Under the agreement, the two companies will merge with SMIC as a surviving entity.
SMIC will issue 43 common shares in exchange for one Allfirst common share or a total of 21.5 million common shares. Of the 21.5 million ordinary shares, 4 million shares will be issued by SMIC to itself and treated as treasury stock, and 17.4 million shares will be issued to the other shareholders of Allfirst.
Previously, SMIC owned 19% of Allfirst; Hans T Sy, 26.92 per cent; Elizabeth T Sy and Harley T Sy each owned 26.91%; while Adelia C. Cua and Asuncion J. Yap each owned 0.13%.
Last year, Philippine Geothermal generated $ 99.4 million in revenue and $ 48.8 million in net income, equivalent to 1.2% of SMIC revenues and 5.5% of profit growth, respectively. net SMIC in 2021.
Philippine Geothermal operates the Tiwi and Mak-Ban steam fields. Tiwi is the first commercial-scale geothermal steam field development in Southeast Asia, followed by Mak-Ban or short for Makiling-Banahaw, both of which have been operational since 1979. Together, they generate enough geothermal steam to produce around 300 megawatts of electricity. .
In addition to its two steam production fields, the company also has several other greenfield concession areas for geothermal steam production that it will develop in the future.
“The acquisition of PGPC is important, positive for our shareholders and fits perfectly with our investment portfolio in high-growth sectors in the Philippines. It further strengthens the SM Group’s commitment to sustainability, good governance and acting as a catalyst for responsible development in the communities we serve, ”said Frederic C. Dybuncio, president and CEO of SMIC.