SM Investments Corp. said it has received regulatory approval for a share-swap of an 81- percent stake in Allfirst Equity Holdings Inc (Allfirst) which owns the the rights to develop the Tiwi and MakBan geothermal steam fields in Albay and in Laguna-Batangas areas.
Allfirst operates the fields through wholly-owned unit Philippine Geothermal Production Company Inc (PGPC).
Valued at P15.76 billion, the share-swap involves 17.44 million primary SM Investments shares, equivalent to a 1.4 percent interest in the company.
The transaction was structured based on a P26.6 billion enterprise valuation of PGPC and SM Investments’ 60-day volume-weighted average price (VWAP) of P903.88 per share, SM Investments said when it was announced in March this year.
Of the two operating geothermal steam fields under PGPC, Tiwi and Mak-Ban are both in operation since 1979. Tiwi was the first commercial-scale geothermal steam field development in Southeast Asia, then followed by Mak-Ban. Together they generate geothermal steam sufficient to produce approximately 300 MW of electricity.
SM Investments said last year, PGPC delivered $48.8 million in profit over $99.4 million of revenues, equivalent to 5.5 percent of the SM Group’s 2021 bottomline, and 1.2 percent of revenues.
In addition to its two producing steam fields, PGPC also has several other greenfield concession areas for geothermal steam production which it will develop moving forward.
“The acquisition of PGPC is sizeable, accretive to our shareholders, and a strong strategic fit with our portfolio of investments in high growth sectors in the Philippines. It further reinforces the SM Group’s commitment to sustainability, good governance and acting as a catalyst for responsible development in the communities we serve,” said Frederic Dybuncio, SM Investments president.
