SMIC receives SEC approval to acquire stake in Allfirst

Conglomerate SM Investments Corp. (SMIC) said on Tuesday that it received approval from the Securities and Exchange Commission (SEC) to acquire the remaining stake it does not own from a company that operates the Tiwi geothermal power plant steamfield in Bicol.

SMIC has acquired an 81% stake in Allfirst Equity Holdings Inc., the holding company of Philippine Geothermal Production Co. Inc. (PGPC) for 15.76 billion pesos.

The deal will include the issuance of 17.44 million new shares to sellers, primarily Sy’s siblings, which is equivalent to 1.4 percent of SMIC’s outstanding shares.

Under the deal, the two firms will merge with SMIC as the remaining unit.

SMIC will issue 43 shares of common stock in exchange for one share of Allfirst common stock, or a total of 21.5 million shares of common stock. Of the 21.5 million shares of common stock, 4 million shares will be issued by SMIC to itself and treated as treasury shares, and 17.4 million shares will be issued to other Allfirst shareholders.

Previously, SMIC owned 19 percent of Allfirst; Hans T. See, 26.92 percent; Elizabeth T. Cy and Harley T. Cy each owned 26.91 percent; while Adelia K. Kua and Asuncion J. Yap each held 0.13 percent.

Last year, Philippine Geothermal generated $99.4 million in revenue and $48.8 million in net income, equivalent to 1.2% of SMIC’s revenue and 5.5% of SMIC’s 2021 net income growth, respectively.

Philippine Geothermal operates the Tiwi and McBan steamfields. Tiwi is the first commercial geothermal steam field in Southeast Asia, followed by Mak-Ban or Makiling-Banahau for short, both of which have been in operation since 1979. Together they produce enough geothermal steam to generate approximately 300 megawatts of electricity.

In addition to two steam producing fields, the company also has several new geothermal steam concessions that it will develop in the future.

“The acquisition of PGPC is significant, beneficial to our shareholders, and strategically fits well with our portfolio of investments in high-growth sectors in the Philippines. This further strengthens SM group’s commitment to sustainability, good governance and acts as a catalyst for the responsible development of the communities we serve,” said Frederic Dybunzio, President and CEO of SMIC.