CURRENT REPORT UNDER SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17.2(c) THEREUNDER
1. Date of Report (Date of earliest event reported)
Dec 19, 2017
2. SEC Identification Number
PW-277
3. BIR Tax Identification No.
000-060-741-000
4. Exact name of issuer as specified in its charter
SAN MIGUEL CORPORATION
5. Province, country or other jurisdiction of incorporation
Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
40 San Miguel Avenue, Mandaluyong City, Metro Manila, PhilippinesPostal Code1550
8. Issuer's telephone number, including area code
(632) 632-3000
9. Former name or former address, if changed since last report
N/A
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class
Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
SMC
2,382,265,715
SMCP1
279,406,667
SMC2B
90,428,200
SMC2C
255,559,400
SMC2D
89,333,400
SMC2E
134,000,100
SMC2F
223,333,500
SMC2G
66,666,600
SMC2H
164,000,000
SMC2I
169,333,400
11. Indicate the item numbers reported herein
Item 9
The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.
San Miguel CorporationSMC
PSE Disclosure Form 5-1 - Substantial Acquisitions References: SRC Rule 17 (SEC Form 17-C) and Section 4.4 and/or Section 5 of the Revised Disclosure Rules
Subject of the Disclosure
Acquisition by the Company of the Masinloc Power Plant
Background/Description of the Disclosure
By way of response to the letter request of the PSE on 19 December 2017, the Company submits this Disclosure relating to a material acquisition by SMC Global Power Holdings Corp., a 100% subsidiary of the Company.
Date of Approval by Board of Directors
Nov 7, 2017
Date of Approval by Stockholders
N/A
Other Relevant Regulatory Agency, if applicable
Philippine Competition Commission
Date of Approval by Relevant Regulatory Agency
TBA
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction
SMC’s subsidiary, SMC Global Power Holdings Corp. ("SMC Global"), intends to improve its baseload capacity to further ensure its ability to provide affordable and reliable supply of power to its customers.
The additional power assets provide an opportunity for the Company to increase its footprint in clean coal technology that provides reliable and affordable power, particularly in Luzon.The transaction will result in the production of electricity in an environmentally responsible way..
Description of the transaction including the timetable for implementation and related regulatory requirements, if any
On 17 December 2017, SMC Global, executed a Share Purchase Agreement with AES Phil Investment Pte. Ltd. and Gen Plus B. V. for the purchase of the (a) 51% and 49% equity interests of AES Phil and Gen Plus, respectively, in Masin-AES Pte. Ltd. (the “Target Company”); (b) 100% equity interest of AES Corporation in AES Transpower Private Ltd., and (c) 100% of equity interest of AES Phil in AES Philippines Inc. The Target Company, through Masinloc Power Partners Co. Ltd. (“MPPCL”), owns and/or operates the 2 x 315 MW coal-fired power plant, the 335 .MW power project expansion unit known as Unit 3 which is under construction, and the 10MW battery energy storage project, all located in the Province of Zambales, Philippines (the “Transaction”). The enterprise value of the Target Company taking into consideration the Transaction is approximately US2.4 Billion. Major events required to bring about the completion of the Transaction are as follows: 1. Receipt of approval from the PCC 2. Approval/consent of the lenders of MPPCL, a subsidiary of the Masin-AES Pte. Ltd. 3. Written waivers from AES Energy Storage, LLC under the Development and Construction Services Agreement between AES Energy Storage, LLC and MPPCL dated as of January 28, 2016 and the Services Agreement between AES Energy Storage, LLC and MPPCL dated as of October 1, 2016 and amended on August 7, 2017 in respect of the change of control of MPPCL arising solely as a result of the proposed Transaction.
Identities of the parties to the transaction
Name
Nature of Business
Nature of any material relationship with the Issuer, their directors/officers or any of their affiliates
AES Phil Investment Pte. Ltd.
holding company
None
Gen Plus B.V.
holding company
None
SMC Global Power Holdings Corp.
holding company
100% subsidiary of Company
Terms and conditions of the transaction
The nature and amount of consideration (e.g. price per share, the aggregate amount)
US$1.9 Billion subject to purchase price adjustment under the share purchase agreement, for the following:
(a ) for Masin-AES Pte. Ltd. – for the following shares: 339,230 ordinary “A” shares and 274,941,691 ordinary “B” shares; (b) for AES Philippines Inc. - for 8,389,995 common shares; and (c ) for AES Transpower Private Ltd. – for 200 ordinary “A” shares and 3,200,000 ordinary “B” shares.
Basis upon which the amount of consideration or value of the transaction was determined
Valuation based on discounted cashflow
The number of shares to be acquired
(a) for Masin-AES Pte. Ltd.- 339,230 ordinary “A” shares and 274,941,691 ordinary “B” shares; (b) for AES Philippines Inc. - 8,389,995 common shares; and (c) for AES Transpower Private Ltd. –200 ordinary “A” shares and 3,200,000 ordinary “B” shares.
Ratio/percentage to total outstanding capital stock
100
Terms of payment
Cash payment on closing, including any purchase price adjustment
Conditions precedent to closing of the transaction, if any
1. PCC Approval of the Transaction
2. Approval/consent of the lenders of MPPCL, a subsidiary of the Masin-AES Pte. Ltd.
3. Written waivers from AES Energy Storage, LLC under the Development and Construction Services Agreement between AES Energy Storage, LLC and MPPCL dated as of January 28, 2016 and the Services Agreement between AES Energy Storage, LLC and MPPCL dated as of October 1, 2016 and amended on August 7, 2017 in respect of the change of control of MPPCL arising solely as a result of the proposed Transaction.
Description of the company subject of the transaction
Nature and business
Power generation
Discussion of major projects and investments
Masin-AES Pte.Ltd. owns and/or operates the 2 x 315 MW coal-fired power plant, the 335 MW power project expansion unit known as Unit 3 which is under construction, and the 10MW battery energy storage project, all located in the Province of Zambales, Philippines.
The Company is also developing a 2 x 20MW battery energy storage facility in Kabankalan, Negros Occidental with a target bilateral contract with the National Grid Corporation of the Philippines for the provision of Regulating Reserve Ancilliary Services.
List of subsidiaries and affiliates, with percentage holdings
Name
% Ownership
Masinloc AES Partners Company Limited
Masin-AES Pte. Ltd., through its Philippines branch (Limited Partner) 99.92%; AES Normandy Holdings B.V. (General Partner) 0.08%
Masinloc AES Power Company Limited
Masin-AES Pte. Ltd., through its Philippines branch (Limited Partner) 60 %; Masinloc AES Partners Co. Ltd. (General Partner) 40%
Effect(s)/impact on the business, financial condition and operations of the Issuer
The Transaction will result in improvement of SMC Global’s baseload capacity to ensure its availability to provide affordable and reliable supply of power to its customers.
Other Relevant Information
Kindly note that the capital structure presented above relates to the Target Company only.
On the capital structure, the Target Company is a Singapore limited liability company and the available information only refers to issued shares.
On the date of the approval of the Board of Directors, kindly note that the date indicated is the date of approval of the Board of Directors of SMC Global.
On the paid up capital, the figures indicated in the Issued Capital are the same as the Paid Up Capital.
On the Principal Officers, the information is not available.
The Company has secured the consent of the relevant parties in submitting the attached financial statements.
Filed on behalf by:
Name
Mary Rose Tan
Designation
Associate General Counsel and Assistant Corporate Secretary
San Miguel CorporationSMC