AC Energy Philippines Inc., formerly Phinma Energy, on Tuesday presented strategic priorities aimed at meeting its goal to reach 2,000 megawatts (MW) of renewable energy (RE) by 2025.
During the company’s annual meeting held in Makati City, AC Energy President Eric Francia said the company will embark on a transformational journey in the next few years.
“Our vision for AC Energy Philippines is to be the leader in RE in the country. Our goal is to reach 2,000 MW of renewables by 2025,” he said. “AC Energy Philippines aims to return to a positive bottom line immediately by 2020, as well as double its capital and generation capacity, and increase thermal availability by over 20 percentage points.”
The RE investments may reach $2 billion.
To achieve this, the company will strengthen the company’s balance sheet via a combination of share swap and a stock rights offering in order to finance future expansion projects, including greenfield and brownfield.
“In order to capture growth opportunities and compete effectively, we propose to increase the company’s balance sheet and capital base. We look forward to increasing the company’s authorized capital stock,” said Francia.
Subject to regulatory approvals, the company will create 16-billion additional shares to implement its growth strategies. Francia said this will be utilized for the planned share swap and stock rights offering. FTI consultants will help the company determine the size for the offering.
“We expect part of that will be used for share swap. We are going to propose infusing certain onshore assets from AC Energy into AC Energy Philippines, or Phinma Energy. The payment of Phinma for these assets will be taken from part of the 16-billion shares that will be created.
He said they are also recommending a stock rights offering, so it is “partly an opportunity for other shareholders to catch up from dilution resulting from this share swap. We will raise fresh funds that we will use for new greenfield and brownfield investments, mostly for RE.”
The details will be presented to the board for approval on October 9. If approved, the company will proceed with the regulatory filings. “It takes three to six months to get approval. We’re targeting early next year, first quarter to second quarter, for the actual launch of the stock rights offer,” said Francia.
With an increased capital base, the company can move forward to invest in strategic assets, and consolidate key operating and developmental assets, such as SLTEC (South Luzon Thermal Energy Corp.) and RE pipeline. “Consolidating the ownership of SLTEC will enable the company to withstand market volatilities and compete for the long term,” he said.
SLTEC is a joint venture of AC Energy, Phinma Energy and Marubeni Corp.’s Axia Power Holdings Philippines Corporation.
The company stressed it will make significant investments in the RE space to help government achieve its RE output target of 35 percent by 2030. “We have a 2025 vision: 5,000 MW of renewables, of which 2,000 MW would come from the Philippines. Right now, Phinma has 62 MW attributable capacity. Of which, 54 MW is wind and 8 MW of geothermal. AC Energy roughly has under 100 MW. Roughly 150 MW of renewables will be the starting base for AC Energy Philippines,” he explained.