The Philippine Competition Commission approved the proposed acquisition of shares in One Taipan Holdings Inc. and Pacifica21 Holdings Inc. by Synergy Grid & Development Philippines Inc.
One Taipan owns controlling shares in Monte Oro Grid Resources Corp., which holds 30 percent plus one share in transmission operator National Grid Corp. of the Philippines. Pacifica21 has controlling shares in Calaca High Power Corp., which in turn owns 30 percent minus one share in NGCP.State Grid Corp. of China owns 40 percent of NGCP.
“Upon review of the findings and recommendation of the Mergers and Acquisitions Office (MAO) and the parties’ submissions, the Commission finds that the proposed acquisition by Synergy of the shares in One Taipan and Pacifica21 will not likely result in substantial lessening of competition in the Philippine market,” the PCC said in a decision.
The PCC said the transaction would not result in any substantial change in the control, operations and management of NGCP and would not likely result in any significant change in the structure of the market for the provision of electricity transmission services.
“The Commission likewise notes the finding of MAO that the corresponding acquisition of equity in Synergy by Mr. Henry Sy Jr. and Mr. Roberto Coyiuto, Jr., as part of the consideration for the transaction, does not meet the size of transaction threshold provided under Section 3, Rule 4 of the IRR, and that it does not appear to result in a change in control of Synergy,” the regulator said.
The commission said it would take no further action with respect to the proposed transaction between Synergy, One Taipan and Pacifica21.
Shareholders of Synergy in December approved a share swap with Sy and Coyiuto., the major shareholders of NGCP. Sy and Coyiuto are also majority shareholders of Synergy Grid.
After the approval, Synergy Grid director and corporate secretary Vicente Gerochi IV said the company would seek the approval of the PCC and the Securities and Exchange Commission.
“Once we get that approval, then we can file with the SEC to amend the articles to increase the capital because that is necessary for the share swap,” he said.
Synergy Grid will own 40.2 percent of NGCP, the country’s transmission operator, once the transaction is completed.
An information statement earlier filed with the Philippine Stock Exchange showed Synergy Grid would increase its capital stock to P5.05 billion, divided into 5.05 billion common shares, in order to swap a 67-percent stake in One Taipan, which is owned by Sy and Pacifica21 of Coyiuto.
“After the share swap, SGP will not own 100% of One Taipan and P21, only 67 percent each. If we compute, that’s 40.2 percent effective shareholding interest (in NGCP),” Gerochi said.
He said the share swap really “is the way that Mr. Sy and Mr. Coyuito will combine their interest in NGCP.”
“They also want Synergy to be used as a platform for other investments, consistent with the business of NGCP. It’s a holding company that wants to engage in infrastructure and allied businesses,” Gerochi said.