The Philippine Stock Exchange (PSE) last Friday lifted the suspension on the trading of the shares of SP New Energy Corporation (SPNEC) after the firm reported that its public float has been raised to 20.02%, meeting the minimum public ownership requirement of 20%. <\/p>\n\n\n\n
The public now owns 6.88 billion SPNEC shares with non-public shares amounting to 27.49 billion shares. Substantial shareholders are Leandro Leviste\u2019s Solar Philippines Power Project Holdings Inc. (SPPPHI) owning 69.79% of shares, and Metro Pacific Investments Corporation (MPI), owning 4.65% shares. <\/p>\n\n\n\n
Furthermore, Manila Electric Company\u2019s (MER) subsidiary MGen Renewable Energy Inc. (MGreen) and (SPNEC) signed a Subscription Agreement on November 30, 2023 for a total investment of P15.9 billion. SPNEC received from MGreen an initial payment of P7 billion on November 4 with the balance payment of P8.9 billion to be paid by the closing date. <\/p>\n\n\n\n
Upon closing, MGreen will own 15.7 billion common shares and 19.4 billion preferred shares of SPNEC, translating to a total voting interest of 50.5%. MGreen is the renewable energy development arm of Meralco Powergen Corporation, a wholly-owned subsidiary of MER.<\/p>\n\n\n\n
Our View:<\/strong> Following the lifted suspension, SPNEC\u2019s share price plunged 19% last Friday as investors offloaded shares. Though SPNEC was able to finally lift its public float, the optics of the deal never looked great. <\/p>\n\n\n\n SPNEC\u2019s parent company SPPPHI had to donate 2.13 billion shares for free in order to raise its public float to over 20%. To be untradable for 6 months only to have the parent company donate outstanding shares for free could mean that SPNEC struggled to find a willing 3rd party to buy a minority stake in the company. <\/p>\n\n\n\n All the uncertainty surrounding SPNEC seems to have frustrated investors into offloading their positions as fast as possible. Moving forward, SPNEC said that it would conduct a follow-on offering (FOO) to support the expansion of its project portfolio and increase the public ownership of its shares. The FOO will be discussed at SPNEC\u2019s December 4 stockholders\u2019 meeting.<\/p>\n\n\n\n