SEC approves SMIC’s takeover of PGPC

MANILA, Philippines — The Sy Group has obtained the approval from the Securities and Exchange Commission to raise its ownership in Allfirst Equity Holdings – the company behind Philippine Geothermal Production Co. Inc (PGPC) – to 100 percent, strengthening its foothold in the renewable energy sector.

PGPC is the operator of the Tiwi-Mak-Ban steam fields in Albay, among the biggest steam field developments in Asia. Together, the two steam fields generate geothermal steam sufficient to produce around 300 MW of electricity. PGPC is not involved in actual power generation, but instead develops and operates the steam fields which it then sells to a power generator.

SMIC president and CEO Frederic Dybuncio said the acquisition of PGPC is sizable, accretive to its shareholders, and a strong strategic fit with the conglomerate’s portfolio of investments in high growth sectors in the Philippines.

“It further reinforces the SM Group’s commitment to sustainability, good governance, and acts as a catalyst for responsible development in the communities we serve,” Dybuncio said.

The SEC has authorized SM Investments Corp. to acquire the 81 percent stake of its partners in Allfirst in exchange for shares in SMIC for P15.76 billion.

The transaction, which will bring SMIC’s ownership in PGPC to 100 percent, involves the issuance of 17.44 million new shares to the sellers, equivalent to 1.4 percent of shares outstanding in SMIC.

In addition, SMIC received the approval from the SEC to merge with Allfirst with SMIC as the surviving corporation.

In 2021, PGPC delivered $99.4 million in revenues and $48.8 million in net income, equivalent to 1.2 percent of SMIC’s 2021 revenues and 5.5 percent accretion to SMIC 2021 net income, respectively.

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.

DyBuncio said PGPC would help SMIC meet expectations for actions on sustainability like SM Prime’s commitment to source half of its energy from renewable sources by the end of 2022.

SMIC is one of the country’s biggest conglomerates. Its retail operations are the country’s largest and most diversified with its food, non-food, and specialty retail stores. SM’s property arm, SM Prime Holdings Inc., is the largest integrated property developer in the Philippines with interests in malls, residences, offices, hotels and convention centers as well as tourism-related property developments.

Its interests in banking are in BDO Unibank, Inc., the country’s largest bank, and China Banking Corp., the sixth largest bank.

SMIC’s portfolio of investments include 2Go, Goldilocks, MyTown and now PGPC.