AC Energy Corp. (Acen), the energy platform of the Ayala Group, has obtained the regulator’s nod to drop oil exploration and mining from its business as it pursues the global agenda of cutting climate-wrecking greenhouse emissions.
In a disclosure to the Philippine Stock Exchange, Acen said the Securities and Exchange Commission’s (SEC) approval of the amendments to its articles of incorporation would also allow it to increase foreign equity in the company.
With the tweaks, Acen can now focus on electric power development, generation and distribution and engage in retail electricity supply.
It also secured the SEC’s approval to change its principal office and corporate name from AC Energy Corp. to Acen Corp.
Acen’s amended corporate charter, announced in November last year, was meant to “remove the activities that place the company’s business under the purview of the Philippine foreign investment negative list, given that the company does not have operations in oil exploration, mining and related activities, and to specify the company’s authority to provide guarantees in furtherance of its business.”
Negative list
The 12th foreign investment negative list, which the government released last month, outlines foreign ownership limitations in key economic areas or activities.
Under the updated list, small-scale mining is reserved for Filipinos while 40-percent foreign equity is allowed in the exploration, development and use of natural resources.
Republic Act No. 11659, which amended the Public Service Act, allows full foreign ownership in certain industries such as airlines, railways and telecommunications. This is still not allowed in some sectors including electricity, water, public utility vehicles, petroleum pipelines and seaports.
Company transition
The Ayala power firm also announced in October last year its commitment to achieving net zero greenhouse gas emissions to limit global warming to 1.5 degrees by 2050.
To attain this goal, Acen would have to transition into a pure renewable energy (RE) company and spin off its thermal assets.
Acen was supposed to enter into a property-for-share swap deal with oil and gas exploration unit ACE Enexor (ACEX) as part of efforts to make its generation 100-percent renewable by 2025.
Acen and Enexor, however, were forced to cancel the said agreement as these would require a follow-on offering and a stock rights offering, which could be a challenge at this time due to “unfavorable market conditions.”
Nonetheless, the listed company would explore other ways to offload the diesel assets, including its direct interest in Palawan55 Exploration and Production Corp., operator of Service Contract 55, a deepwater block off the southwest Palawan Basin covering 9,880 square kilometers in offshore West Palawan.