The Philippine Competition Commission (PCC) said it has given the greenlight for offshore holding company Proverbs 16 Inc.’s acquisition of shares in three subsidiaries of Ayala Corp.’s energy unit AC Energy Inc.
The transaction covers the acquisition of indirect ownership of GNPower Kauswagan Ltd. Co. (GNPK) in Lanao Del Norte, through the purchase of shares in three holding companies of AC Energy – BVI (Philco), ACE BVI (b), and ACE BVI (d).
“These three subsidiaries of AC Energy hold a limited partnership interest over Kauswagan Power Holding Ltd. Co., which in turn has a limited partnership interest in GNPK. At present, GNPK stands as the operator of the 552-MW coal-fired power plant project estimated to be completed by the fourth quarter of 2019,” the PCC said.
Following the completion of the transaction, AC Energy said it will exit from its investment in GNPK’s power plant project.
Proverbs 16, a US-based holding company, currently holds interest in GNPK through Power Partners Ltd. Co. and GNPower Holdings GP Corp.
PCC gave its clearance for the purchase as the merger review found Proverbs 16’s acquisition of shares in GNPK will not likely result in substantial lessening of competition in terms of power generation and sale of electricity in the relevant markets.
“This is primarily due to competitive constraints exerted by other power plants in the Mindanao grid, and competitive pressure from other power providers nationwide when traded in the electricity spot market,” PCC said.
“With the acquisition resulting in added power portfolio by the acquiring firm, PCC also found the transaction does not significantly strengthen the ability or incentive of the parties to engage in foreclosure on customers or of its power supply,” it added.