SMIC buys energy firm in P16-B pact
The acquisition of PGPC is sizable, accretive to our shareholders, and a strong strategic fit with our portfolio of investments
SM Investments Corp. (SMIC), the country’s largest conglomerate, took full control of the Philippine Geothermal Production Company Inc. (PGPC), which operates the Tiwi and Makban geothermal plants, after a successful P15.76-billion share-swap deal involving its affiliates.
The company informed the stock exchange on Tuesday that the acquisition of 81 percent stake of related parties in Allfirst Equity Holdings Inc. (Allfirst), PGPC’s holding firm, in exchange for shares in SMIC was green-lighted by the Securities and Exchange Commission.
“The acquisition of PGPC is sizable, accretive to our shareholders, and a strong strategic fit with our portfolio of investments in high growth sectors in the Philippines,” SMIC president and chief executive officer Frederic Dybuncio said.
“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,” he added.
17-M shares issued
SMIC paid P15.76 billion for the transaction, which involved the issuance of 17.44 million new shares to the sellers, equivalent to 1.4 percent of shares outstanding in SMIC.
In 2021, PGPC delivered $99.4 million in revenues and $48.8 million in net income, equivalent to 1.2 percent of SMIC 2021 revenues and 5.5 percent accretion to SMIC 2021 net income, respectively.
PGPC 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, both in operation since 1979. They generate geothermal steam sufficient to produce approximately 300 megawatts of electricity.
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