SM Investments Corp (SMIC) said Tuesday it has received approval from the Securities and Exchange Commission (SEC) to acquire the remaining stake it does not hold from the company that operates the steam business of the Tiwi geothermal power plant in Bicol.
SMIC has bought an 81 percent stake in Allfirst Equity Holdings Inc. , the holding company of Philippine Geothermal Production Co. Inc. (PGPC), for 15.76 billion pounds.
The transaction will involve the issuance of 17.44 million new shares to sellers, mainly C-siblings, equivalent to 1.4 percent of SMIC’s outstanding shares.
According to the deal, the two companies will merge with SMIC as the surviving entity.
SMIC will issue 43 ordinary shares for one ordinary share of Allfirst, or a total of 21.5 million ordinary shares. Of the 21.5 million ordinary shares, 4 million will be issued by SMIC to itself, and will be treated as treasury shares, and 17.4 million shares will be issued to other shareholders of Allfirst.
Previously, SMIC owned 19% of Allfirst; Hans T. Say 26.92 percent; Elizabeth TC and Harley TC, each owning 26.91 percent; While Adelia C. Cua and Asuncion J. Yap each own 0.13 percent.
Last year, Philippines Geothermal generated $99.4 million in revenue and $48.8 million in net income, equal to 1.2% of SMIC’s revenue and 5.5% of SMIC’s net income in 2021, respectively.
Philippine Geothermal operates the Tiwi and Mak-Ban steam fields. Tiwi is the first commercial-scale geothermal steam field to be developed in Southeast Asia, followed by Mak-Ban or short for Makiling-Banahaw, both of which have been in operation since 1979. Together they generate enough geothermal steam to produce nearly 300 megawatts of electricity.
In addition to the two producing steam fields, the company also has several other concession areas for the production of geothermal steam that it will develop in the future.
“The acquisition of PGPC is significant, growing for our shareholders, and a strong strategic fit for our investment portfolio in the Philippines’ high-growth sectors. It also reinforces SM Group’s commitment to sustainability and good governance and act as a catalyst for responsible development in the communities we serve.”