GSIS bets P1.45B on Alternergy

State-run pension fund Government Service Insurance System or GSIS is pouring in P1.45 billion in investments into Alternergy Holdings Corp., a renewable energy firm led by former Energy chief Vicente Pérez Jr.

The investment will be executed by GSIS' subscription to Alternergy's Perpetual Preferred Shares 2 Series A under a private placement, the agreement of which was signed last Monday, 7 November.

"Our growing commitment to sustainability propels us to build a solid investment portfolio of renewable energy infrastructure projects. Our investment in renewable energy not only dovetails with the country's National Renewable Energy Program but also provides a foundation for stable returns," GSIS president and general manager Jose Arnulfo Veloso said on Tuesday.

Meaningful, profitable investments

Veloso also reiterated that the investments to Alternegy are expected to translate to "meaningful and profitable investments for our pensioners."

For Alternergy president Gerry Magbanua, the equity infusion from GSIS will "significantly boost our equity base as part of our medium-term capital raising program."

"This landmark offering was strategically arranged and made possible by our long-time financial advisor, the Investment & Capital Corporation of the Philippines," he added.

Investment & Capital Corporation of the Philippines acted as the financial adviser and sole placement manager for the private placement.

Subject to certain regulatory approval by the Securities and Exchange Commission, the issuance of the private placement will happen "later this year."

Alternergy recently completed a series of corporate finance transactions to raise money for its project portfolio.

Reclassification of preferred shares

In early October, Alternergy's shareholders voted to reclassify the company's preferred shares into three series of non-voting perpetual preferred shares.

Alternergy also enlisted the help of three investment banks — BPI Capital, RCBC Capital and SB Capital — as lead arrangers to raise P12 billion in project finance for its Tanay and Alabat Wind Power Projects, which were awarded under the Department of Energy's Green Energy Auction 2.