Energy Development Corp. plans delisting on Nov 29 2018

MANILA, Philippines — Energy Development Corp. (EDC) is targeting to delist from the Philippine Stock Exchange (PSE) on Nov. 29 as part of its corporate strategy to gain greater flexibility.

EDC filed a petition with the PSE its petition to voluntary delist its common shares from the main board.

The company is set conduct a tender offer for up to 2.04 million common shares held by the public at P7.25 per common share, in compliance with the delisting rules. The tender offer is scheduled to commence on Sept. 24 until Oct. 22.

EDC said its tender offer price represents a 46 percent premium over the closing share price of P4.95 on Aug. 7  and a 40 percent premium over the three-month volume weighted average price of P5.18.

Its independent financial adviser KPMG issued an opinion based on an independent valuation that the tender offer price is “fair and reasonable from a financial point of view.” 

EDC has also secured the approval of the Securities and Exchange Commission (SEC) to extend its tender offer by an additional 20 days from the original 60-day rule.

With the completion of the tender offer, EDC’s public float will go down from 10.9 percent to less than five percent, allowing a voluntary delisting of the company, subject to PSE approval. 

In August last year, parent firm First Gen Corp.  entered into an agreement with Philippine Renewable Energy Holdings Corp. (PREHC) to sell up to 31.7 percent of the former’s stake in EDC.

The voluntary tender offer to acquire 8.9 billion common shares of EDC for $1.3 billion was completed the next month.

During that time, First Gen and PREHC announced their intentions to eventually delist EDC to allow them greater flexibility over factors like dividend policy and leverage, and to support long-term growth. 

First Gen retained its majority voting stake in EDC through wholly-owned subsidiary Red Vulcan Holdings Corp., Northern Terracotta Power Corp. (NTPC). It has a 40 percent economic stake in EDC but will retain a 60 percent voting stake.

The new partners will bring in an experienced and credible partner to grow First Gen’s renewable energy platform.

First Gen is part of the Lopez Group of companies and has 3,477 megawatts of installed capacity from natural gas, geothermal energy from steam, hydro-electric, wind, and solar power. It accounts for 16 percent of the country’s installed capacity.