C08351-2020

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

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 1, 2020
2. SEC Identification Number
39274
3. BIR Tax Identification No.
000-506-020-000
4. Exact name of issuer as specified in its charter
AC Energy Philippines, Inc.
5. Province, country or other jurisdiction of incorporation
Makati City, Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
4th Floor, 6750 Office Tower, Ayala Avenue, Makati City Postal Code 1226
8. Issuer's telephone number, including area code
(02) 7730 6300
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
Common Shares 13,692,457,210
Amount of Debt Outstanding 3Q 2020 (in billions) 31.17
11. Indicate the item numbers reported herein
N/A

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.

AC Energy Philippines, Inc.ACEN

PSE Disclosure Form 4-22 - Joint Ventures References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Shareholders' Agreement among AC Energy Philippines, Inc., ACE Endevor, Inc., and Axia Power Holdings Philippines Corp.
Background/Description of the Disclosure

The Company, a subsidiary of AC Energy, Inc. (“ACEI”), and ACE Endevor, Inc. (“Endevor”), the Company’s wholly-owned subsidiary, signed a Shareholders’ Agreement (the “Agreement”) with Axia Power Holdings Philippines Corp. (“Axia”), a subsidiary of Marubeni Corporation, for the development, construction and operation of the 150 megawatt (MW) diesel power plant project in Pililla, Rizal (the “Ingrid Project”), which is expected to be operational in the first quarter of 2021.

Under the Agreement, Axia will acquire 50% of the shares and 50% of the economic rights in the Company’s subsidiary Ingrid Power Holdings, Inc. (“Ingrid”), the special purpose vehicle of the Ingrid Project, while the Company will hold 50% shares and 45% of the economic rights, with Endevor having a 5% share of the economic rights in Ingrid.

Ingrid and Endevor were among the ACEI subsidiaries acquired by the Company in exchange for ACEPH shares. As of January 2020, the Company has infused Php570 Million into Ingrid to fund the Ingrid Project.

On 1 December 2020, the Company received a copy of the Philippine Competition Commission's ("PCC") Decision No. 20-M-017/2020 dated 24 November 2020 finding that the transaction "will not likely result in substantial lessening of competition" and resolving "to take no further action with respect to the proposed Transaction among Axia Power, ACE PH, Endevor and Ingrid Power" (the “PCC Decision”).

This disclosure was amended today, 1 December 2020, to apprise the public of the Company’s receipt of the PCC Decision.
Date of Approval by Board of Directors Oct 9, 2019
Date of Approval by Stockholders, if applicable N/A
Description and nature of the transaction including the timetable for implementation, and related regulatory requirements

The Agreement provides for the terms by which the Parties shall develop the Ingrid Project and the terms and conditions governing the ownership, management and operation of the project company. The Ingrid Project is a 150MW high-speed, diesel-fueled power plant project located in Brgy. Malaya, Pililla, Rizal which is intended, among others, to provide ancillary services to the National Grid Corporation of the Philippines. The plant will supply peaking and reserve power to the Luzon grid.

Completion of the transaction is subject to approval by the Philippine Competition Commission, which approval was issued on 1 December 2020. Completion will be scheduled by the parties in due course.

Issuance of the shares is subject to the necessary regulatory approvals for the increase of Ingrid's authorized capital stock and creation of new shares.
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction

This joint venture supports the Company’s strategic objective to be the growth platform of the AC Energy Group in the country. The Company will have the opportunity to develop a greenfield project which will provide peaking and reserve power in partnership with Axia, which has extensive experience in the local and international power sector.
Terms and conditions of the joint venture
Amount of investment and/or interest by the parties involved

Ingrid will have a total subscribed capital of Php1.97 billion.
Provisions on profit-sharing, arrangements on management and operations

Under the Agreement, Axia will acquire 50% of the voting shares and 50% of the economic rights in Ingrid, while the Company will hold 50% voting shares and 45% of the economic rights, with Endevor having a 5% share of the economic rights in Ingrid.

The Board shall consist of five (5) members, majority of whom shall be residents of the Philippines. As long as Axia and ACEPH each hold fifty percent (50%) interest in the Corporation, each will have the right to nominate two (2) directors with the fifth (5th) director to be nominated jointly.

Development and construction costs shall be shared equally by the Parties.
Conditions precedent to closing of transaction, if any

Approval of the Philippine Competition Commission
Other salient features of the joint venture agreement

None
Identity and/or corporate background of the parties to the transaction, including the following
Name Nature of Business Nature of any material relationship with the Issuer and the parties to the joint venture, their directors/officers or any of their affiliates
Axia Power Holdings Philippines Corporation Power Generation None
ACE Endevor, Inc. Generation, Collection and Distribution of Electricity Wholly-owned subsidiary of the Company
Effect(s) on the business, financial condition and operations of the Issuer, if any

The Company will have 50% voting rights and 45% of the economic rights in Ingrid. The Company will have the opportunity to earn stable dividend income from the operations of the Ingrid Project.
Other Relevant Information

Investment into the project was previously disclosed by the Company on October 10, 2019 in Disclosure No. C07067-2019.
Filed on behalf by:
Name Alan Ascalon
Designation Vice President/ Asst. Corporate Secretary