Group bids for 30% stake in EDC, Philippines’ geothermal power house

Southern Negros geothermal plant, Negros Oriental, Philippines (source: Mike Gonzalez, creative commons BY-SA 3.0)
Alexander Richter 4 Aug 2017

A joint venture of Macquarie, Singapore's sovereign wealth fund and Arran Investment launch bid for 32% stake in Philippines' Energy Development Company (EDC) valued at around $1.3 billion.

Australian investment and financial group Macquarie teams up with Singapore sovereign wealth fund GIC in a bid for up to 47.1%% in geothermal power house Energy Development Company (EDC) in the Philippines. The group would acquire First Gen’s 10.6% stake and public investors’ 36.5% stake in EDC

The group has formed Philippines Renewable Energy as a joint venture through Macquarie Infrastructure and Real Assets (MIRA) and Arran Investment, an affiliate of GIC.

The offer made by the group is for a minimum 6.6 billion shares and up to a maximum of 8.9 billion commons shares from shareholders of EDC.

This represents about 32% of EDC’s outstanding voting shares. The value is said to be worth around $1.3 billion (USD).

First Gen Corporation announced it is selling its minority stake in EDC, to a consortium, but it will still retain control. “While there is a firm intention to delist the company voluntarily [post-transaction], the specific terms and procedures for delisting will be agreed at a later stage,” PREHC said in the tender offer report to the Securities and Exchange Commission (SEC) on August 3, 2017.

First Gen will retain its 40% stake in EDC through unit Red Vulcan’s common share, while PREHC will have up to 47.5% of common shares.

EDC is the largest geothermal operator in the Philippines with an installed capacity of 1,169 MW geothermal power generation capacity. EDC also operates hydro and wind power plant.

Macquarie is said to want to increase its renewable energy investment portfolio, so this offer makes sense.

Source: Bilyonaryo, Rappler