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Manila Electric Company (MER) has completed its acquisition of Leandro Leviste’s SP New Energy Corporation (SPNEC) and is now set to take the helm of the solar company. In a recent disclosure, MGen Renewable Energy (MGreen), a subsidiary unit of MER, completed its Php 15.9 billion investment in SPNEC.
This translates to MGreen having a total voting interest in SPNEC of 50.5%. As a result, SPNEC elected Manny Pangilinan as its chairman, President and CEO with Leandro Leviste as Vice Chairman. SPNEC is the developer of a planned 3.5 GW solar project centered in Nueva Ecija, which would be the world’s largest single contracted solar project.
Prior to the transaction, Solar Philippines, the parent company of SPNEC, sold 1.6 billion secondary shares of SPNEC for Php 2 billion to Metro Pacific Investments Corporation (MPI). It entered into an option agreement to sell up to 7.4 billion secondary shares for up to Php 9.25 billion.
Our View: MER entering into the renewable energy (RE) sector. MER’s acquisition of SPNEC is in line with the company’s plan to expand its RE portfolio, with the company having a target capacity of Php 1.5 GW by 2030.MGreen plans to use SPNEC as the primary vehicle to develop 3,500 MW of solar panels and 4,000 megawatt-hours of battery energy storage systems in Luzon, making it one of the largest solar projects globally.
Furthermore, MER’s takeover of SPNEC has had a positive impact on SPNEC’s share price, with the stock rising +20% for the past week. The entry of the MVP group of companies into SPNEC seems to have provided more optimism for investors following frustrations and uncertainty with SPNEC for the past 6 months. MER’s financial resources and vast experience could help accelerate the development of projects at SPNEC.
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