ACEN, ACE Enexor cancel property-for-share swap

ACEN – Enexor

Ayala-led ACEN and exploration subsidiary ACE Enexor (ENEX) have canceled its property-for-share swap agreement involving diesel and other assets due to “unfavorable market conditions.” 

Both firms’ boards of directors approved the deed of cancellation of the share swap, ACEN and ENEX said in their respective disclosures to the Philippine Stock Exchange on Friday.

The property-for-share swap was supposed to include the transfer to ACE Enexor from ACEN its direct interest Palawan55 Exploration & Production Corporation; ownership interests in the Bulacan Power Generation Corporation, CIP II Power Corporation, and One Subic Power Generation Corporation; as well as interest in Ingrid3 Power Corp. Palawan55 controls the Service Contract (SC) 55 exploration block in the West Philippine Sea.

In exchange, ENEX was supposed to issue 339,076,058 primary shares to ACEN. 

ACEN President and CEO Eric Francia said in the maiden episode of Power Podcast last year that the share-swap is part of the company’s energy transition strategy with the goal of having a 100% renewable energy (RE) portfolio by 2025.

(Podcast Eric Francia)

As a result, ENEX’s stock rights offering (SRO) and follow-on offering (FOO) were also canceled.

“The transaction would have required a [FOO] and [an SRO] following relevant market rules, which will be challenging to execute under current economic conditions,” ACEN and ENEX said in a statement on Monday. 

ENEX disclosed in December 2021 that it was supposed to offer 105 million shares in the supposed SRO at Php10 each. A total of 74 million shares, meanwhile, would have been offered in its FOO with a price range of Php10 to Php 11.84 per share. 

“During the past few months, the management teams of ACEN and ENEX have exerted diligent and good faith efforts in planning and mapping out the implementation of the various steps needed to comply with the foregoing requirements. However, this has proven to be very challenging given the economic uncertainties due to the continuing pandemic and exacerbated by the Ukraine-Russia conflict,” the statement continued.

ENEX said it will continue to explore relevant opportunities in energy transition space, including the opportunities under SC55 as its management continues to look for the right partner for this endeavor.

ACEN, meanwhile, said it will continue to explore other means to transition the diesel assets and its direct ownership interest in Palawan55, as it remains committed to achieve its 2025 all-RE goal.