Voluntary Delisting Tender Offer of EDC

 
Background:
 
On 7 August 2018, EDC approved the voluntary delisting of its common shares from the Philippine Stock Exchange (PSE), and, in this connection, the conduct of voluntary delisting tender offer for up to 2,040,006,713 common shares (all remaining common shares held by the public)* , representing approximately 10.9% of its total outstanding common shares, at the tender offer price of P7.25 per common share (Tender Offer Price). EDC is expected to be delisted from the PSE in November 2018 following the completion of the delisting tender offer (and approval of the delisting by the PSE)**.
 
More information can be found in the Tender Offer Report (SEC Form 19-1), which will be made available to shareholders on or before the commencement of the tender offer on 25 September 2018, and will include the terms and conditions of the tender offer, along with other relevant information.
 
This document does not constitute a prospectus or other offering memorandum in whole or in part. Information contained in this presentation is a summary only and is prepared for discussion purposes. This document shall not constitute an offer to sell or a solicitation of an offer to buy any security. There shall be no sale of these securities in any country or jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under securities laws of such country or jurisdiction.
 
The Tender Offer Report (SEC Form 19-1) relating to the tender offer has not been filed by the Company with the Securities and Exchange Commission (SEC). Nothing herein should be construed as a solicitation for an offer or an offer by the Company to buy or purchase any of the common shares of the Company until the Tender Offer Report has been filed by the Company with the SEC.
 
This document is not the Tender Offer Report and is intended only to provide additional information to shareholders of the Company based on information relating to the tender offer publicly available with the SEC and the PSE.
 
Question 1: What is a voluntary delisting tender offer?

A voluntary delisting tender offer is a publicly announced intention by the company to acquire the remaining publicly-held common shares in order to voluntarily delist itself from the PSE. If the company is delisted, its shares will no longer be traded on the PSE, which could affect investors’ ability to liquidate their investment in the future.
 
Question 2: What is the benefit of the voluntary delisting tender offer to the shareholders?

This offer provides an opportunity for minority shareholders of EDC to sell their common shares through the PSE before the delisting and realize their investment at a premium to the current share price. The offer price of P7.25 per share represents a premium of 46% to the closing price on 7 August 2018, and is in line with the price Philippines Renewable Energy Holdings Corporation offered in 2017.
 
EDC has engaged KPMG, an independent financial adviser, to give a fairness opinion. The offer price is above the range provided by KPMG and KPMG is of the opinion that the offer price is fair and reasonable from a financial point of view.
 
Common shareholders should be aware that, following the completion of the tender offer, all of the company’s issued and outstanding common shares are expected to be delisted from the PSE. Once delisted, EDC’s shares will no longer be traded on the PSE, which could impact investors’ ability to liquidate their investment in the future.
 
The sale and transfer of shares following the delisting may also be subject to 15% capital gains tax and applicable documentary stamp tax, which are substantially higher than the stock transaction tax of 0.6% applicable on gross proceeds when selling shares through the PSE.
 
Question 3: When is the tender offer period?

Subject to the filing of the Tender Offer Report (SEC Form 19-1) with the SEC, the tender offer period is expected to begin at 9.00am on 25 September 2018 and end at 12.00pm on 22 October 2018.
 
As approved by the EDC Board of Directors, the completion of the tender offer is subject to (among other conditions) a minimum of 1,162,000,000 common shares being tendered and eligible for acceptance by EDC through the tender offer, which will reduce the percentage of shares held by the public from 10.9% to less than 5.0%, and in turn, allow a voluntary delisting of the company (subject to PSE approval) (the Threshold Condition).
 
EDC can extend the tender offer period (with prior approval of the SEC) and may, at its discretion, waive the Threshold Condition.
 
Question 4: How do I participate in the tender offer?

This will be explained in the Tender Offer Report, which will be filed with the SEC and the PSE on or before the commencement of the tender offer on 25 September 2018. Copies of the Tender Offer Report and the relevant tender offer materials will be sent to each common shareholder separately. EDC shall ensure that the Tender Offer Report and the relevant tender offer materials can be downloaded from the EDC website promptly after the filing of the Tender Offer Report with the SEC and the PSE.
 
Question 5: When will shareholders who choose to participate in the tender offer receive payment?

Subject to the satisfaction (or waiver by EDC) of the Threshold Condition, shareholders who tender their shares are expected to receive payment within 10 business days following the close of the tender offer period.
 
Question 6: When will EDC be delisted from the PSE?

Unless the tender offer period is extended, EDC is expected to be delisted from the PSE in November 2018 (subject to approval by the PSE of the voluntary delisting).
 
Question 7: Where can I go for more information?

More information can be found in the Tender Offer Report (SEC Form 19-1), which will be filed with the SEC and PSE on or before the commencement of the tender offer on 25 September 2018, and will include the terms and conditions of the tender offer, along with other relevant information.
 
Copies of the Tender Offer Report and the relevant tender offer materials will be sent to each common shareholder separately. EDC shall ensure that the Tender Offer Report and the relevant tender offer materials can be downloaded from the EDC website promptly after the filing of the Tender Offer Report with the SEC and the PSE.
 
*Represent total common shares held by all shareholders other than Red Vulcan Holdings Corporation, Northern Terracotta Power Corp., First Gen Corporation and Philippines Renewable Energy Holdings Corporation; Red Vulcan Holdings Corporation and Northern Terracotta Power Corp. are wholly-owned subsidiaries of First Gen Corporation.
**EDC can extend the tender offer period (with prior approval from the SEC), which may result in a delay in the delisting of EDC.

Voluntary Delisting Tender Offer Presentation