Philippines Renewable Energy Holdings Corp. (PREHC) yesterday announced an offer to buy up to 8.9 billion common shares in Energy Development Corp. (EDC), or a 31.7-percent interest.
Also, the offer is for a minimum of 6.6 billion common shares representing 23.5 percent of total outstanding shares of EDC. The offer begins at 9 a.m. of Aug. 10 and ends at 12 noon of Sept. 18.
First Gen Corp. welcomed the tender offer, which the company said would deliver proceeds of about $280 million or P14 billion, which would be used to help reduce financial obligations.
Federico R. Lopez, First Gen chair and chief executive, said in a press briefing that the parent company would keep a 40-percent economic interest and 60-percent voting control in EDC.
Lopez said the incoming investor wanted the key management team to remain, adding that the success of the tender offer “seals a successful partnership (with) patient, long-term, knowledgeable investors.”
He said that at P7.25 per share, the offer was attractive as this represented a 20-percent to 22-percent premium over the market price.
“First Gen is going to be (taking part in) this tender to the extent of (selling) 10.6 percent” of its 50.6-percent stake in EDC, Lopez said.
In a statement, First Gen said the tender offer provided the firm with an opportunity to realize part of its investment in the country’s largest renewable energy company.
In a separate statement, EDC said PREHC was making the offer with the intention of using its expertise to support the long-term growth of EDC.
Upon the completion of the tender offer, the PREHC will be indirectly held by a consortium of investors comprising funds managed by Macquarie Infrastructure and Real Assets, and Arran Investment Pte Ltd, which is an affiliate of Singapore’s wealth fund GIC.