SMIC secures nod of SEC to acquire stake in Allfirst

Conglomerate SM Investments Corp. (SMIC) said on Tuesday it received approval from the Securities and Exchange Commission (SEC) to acquire the remaining stake that it does not own from the company that operates the steam field in the Tiwi geothermal power plant in Bicol.

SMIC has bought the 81-percent stake in Allfirst Equity Holdings Inc., the holding company for Philippine Geothermal Production Co. Inc. (PGPC), for P15.76 billion.

The transaction will involve the issuance of 17.44 million new shares to the sellers, mainly the Sy siblings, equivalent to 1.4 percent of shares outstanding in SMIC.

According to the deal, the two firms will merge with SMIC as the surviving entity.

SMIC will issue 43 common shares in exchange for one Allfirst common share or a total of 21.5 million common shares. Out of the 21.5 million common shares, 4 million shares will be issued by SMIC to itself, and treated as treasury shares, and 17.4 million shares will be issued to the other shareholders of Allfirst.

Previously, SMIC owned 19 percent of Allfirst; Hans T. Sy, 26.92 percent; Elizabeth T. Sy and Harley T. Sy, each owned 26.91 percent; while Adelia C. Cua and Asuncion J. Yap each owned 0.13 percent.

Last year, Philippine Geothermal delivered $99.4 million in revenues and $48.8 million in net income, equivalent to 1.2 percent of SMIC revenues and 5.5 percent accretion to SMIC net income in 2021, respectively.

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 in operation since 1979. Together, these generate geothermal steam sufficient to produce approximately 300 megawatts of electricity.

In addition to its two producing steam fields, the company also has several other greenfield concession areas for geothermal steam production which it will develop in the future.

“The acquisition of PGPC is sizeable, accretive to our shareholders, and a strong strategic fit with our portfolio of investments in high growth sectors in the Philippines. It further reinforces 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, SMIC president and CEO.