C08473-2023 |
Title of Each Class | Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding | |
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Common Shares | 39,677,394,773 | |
Series A Preferred Shares | 8,341,500 | |
Series B Preferred Shares | 16,658,500 |
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Subject of the Disclosure |
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Disposition of land by Buendia Christiana Holdings Corp. ("BCHC"), a wholly owned subsidiary of ACEN CORPORATION (“ACEN”), in exchange for shares of AREIT, Inc. (“AREIT”) via property-for-share swap. |
Background/Description of the Disclosure |
AREIT and BCHC will execute a property-for-share swap whereby AREIT will issue 199,109,438 primary common shares (the “Shares”) to BCHC in exchange for land with an aggregate size of 2,759,135 square meters (sq.m.) located in the Province of Zambales (the “Property”) valued at PhP6,769,720,892.00 (the “Transaction”), at PhP34.00 per share (the “Transaction Price”), set at a 3.75% premium over AREIT’s 30-day VWAP of PhP32.77 or the Market Price. |
Date of Approval by Board of Directors |
Nov 16, 2023 |
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Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction | |
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BCHC will be a shareholder of a listed company and will be able to receive dividends. |
Date | TBA |
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Description of the Transaction |
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AREIT and BCHC will execute a property-for-share swap whereby AREIT will issue the Shares to BCHC in exchange for the Property valued at PhP6,769,720,892.00 at PhP34.00 per share, set at a 3.75% premium over AREIT’s 30-day VWAP of PhP32.77 or the Market Price. |
Manner |
Property-for-share swap |
Description of the assets involved |
276-hectare parcel of land located in Zambales |
Nature and amount of consideration given or received |
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Transaction Price of approximately PhP6.77 billion, equivalent to 199,109,438 primary common AREIT shares at a Share Price of PhP34.00 per share. The property was valued using the initial EBITDA over a capitalization rate of 6.92%. The Share Price was set at a 3.75% premium over AREIT’s 30-day VWAP of PhP32.77 or the Market Price. |
Principle followed in determining the amount of consideration |
FTI Consulting (“FTI”) was engaged to provide valuation and fairness opinion on the transaction. FTI used the Discounted Cashflow ("DCF") Approach as the primary method to estimate the fair value of the AREIT shares and the Property. The Comparable Public Companies Method and the Volume Weighted Average Price Method were used as secondary methods to cross-check the value of the AREIT shares. The Direct Capitalization Approach was used to cross-check the value of the Property. |
Terms of payment |
The shares shall be issued in BCHC’s name and the land’s ownership will be transferred to AREIT upon the Securities and Exchange Commission (“SEC”)’s approval of BCHC’s subscription to AREIT shares. |
Conditions precedent to closing of the transaction, if any |
The AREIT shareholders’ approval of the Transaction in their special meeting in February 2024. |
Any other salient terms |
AREIT shall apply for the additional listing of the Shares with the PSE. |
Effect(s) on the business, financial condition and operations of the Issuer, if any |
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BCHC will be a shareholder of a listed company and will be able to receive dividends. |
Other Relevant Information |
Prior to securing approval of the Board of Directors, this transaction has been reviewed and approved by ACEN’s Board Risk Management and Related Party Transactions Committee. |
Source(s) of funds |
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N/A |
If any asset so acquired by the issuer or its subsidiaries constituted plant, equipment or other physical property, state the nature of the business in which the assets were used by the persons from whom acquired and whether the issuer intends to continue such use or intends to devote the assets to other purposes, indicating such other purposes |
N/A |
Name | Alan Ascalon |
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Designation | Vice President/Asst. Corporate Secretary |