Fundraising

GIC and MIRA in $1.3bn bid for Filipino geothermal stake

The two foreign investors are looking to buy into the largest geothermal company in country.

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Macquarie Infrastructure and Real Assets and Arran Investment, an affiliate of Singapore sovereign wealth fund GIC, have offered to buy about a third of Energy Development Corporation, the largest producer of geothermal energy in the Philippines.

The two investors formed a consortium, dubbed Philippines Renewable Energy Holdings Corporation, in a bid to buy 6.6 billion to 8.9 billion common shares of EDC at 7.25 pesos ($0.144; €0.122) per share, or up to $1.3 billion in total for the 31.7 percent of voting shares. The price represented a premium of 22.3 percent to the 30-day volume weighted average price of EDC’s shares at 5.93 pesos each. 

First Gen Corporation, majority owner of EDC, said it had entered into an implementation agreement with the consortium last week. It will tender 10.6 percent of total outstanding common shares in EDC, subject to scale-back provisions under applicable regulations, First Gen said. 

If the transaction is successful, First Gen will receive approximately 14 billion pesos in proceeds and continue to own a 60 percent voting interest in the company through its wholly-owned subsidiary Red Vulcan Holdings corporation. 

The tender offer will open on 10 Aug and close on 18 September.

First Gen is the country’s largest producer of clean energy, owning a portfolio of about 3.5GW of renewable energy assets, or about 16 percent of the Philippines’ installed capacity. EDC, on the other hand, owns 1,17GW of geothermal power generation, as well as some wind, hydro and solar assets. 

The bidders intend to form a long-term partnership with First Gen to bring their experience and expertise to the geothermal company, according to David Luboff, senior managing director of MIRA. 

EDC noted that MIRA and GIC have experience in owning and operating renewable energy businesses, with a combined installed capacity of over 11GW globally. MIRA also runs the first and largest Philippines infrastructure fund, which has committed about $500 million across six investments since 2012.Â