EDC seeks green light for planned delisting

Energy Development Corp. (EDC) has asked the Securities and Exchange Commission (SEC) to allow its voluntary delisting from the Philippine Stock Exchange (PSE), a plan announced in October 2017 when EDC took in a major investor.

In a regulatory filing, Lopez-led EDC said it had met most of the requirements for delisting, and that a tender offer covering about 2 billion common shares was ongoing.

Earlier this week, the company said the SEC approved its request to extend its tender offer by 20 days.

Minority shareholders may now offer their stocks until Nov. 5. EDC is prepared to purchase up to 2.04 billion common shares at a price of P7.25 apiece or a total of about P14.8 billion.

EDC quoted a letter from SEC as saying: ”… it is the view of the commission that under this situation, extending the tender offer period is for the benefit of the company’s shareholders. Thus, granting the extension request is consistent with public interest and protection of investors.”

The offer does not cover shares held by Red Vulcan Holdings Corp., First Gen Corp., Northern Terracotta Power Corp. and Philippines Renewable Energy Holdings Corp. (PREHC).

In August, the board of EDC approved the move for voluntary delisting. This was 10 months after PREHC acquired 8.9 billion shares representing a 31.7-percent interest in the energy firm.

PREHC is a consortium of investors composed of funds managed by Macquarie Infrastructure and Real Assets (Mira) and Arran Investment Pte Ltd (Arran), an affiliate of GIC Pte Ltd.

In October, EDC chair Federico R. Lopez said Mira and GIC were the right partners as they represented “long-term and astute capital.”

Lopez also said PREHC’s entry provided EDC with an opportunity to realize part of its investment in the country’s largest renewable energy company.

He also said PREHC and parent firm First Gen intended “to eventually delist or undertake the necessary actions that will lead to delisting” EDC from the PSE.

This was because both planned “to pursue a corporate strategy for [EDC] which will require greater flexibility over factors like its dividend policy—for example enabling it to reinvest a greater proportion of retained earnings into the business—and leverage.”