Meralco renewables unit invests nearly P16B for SPNEC control

MERALCO POWERGEN Corp.’s renewable energy unit is investing P15.9 billion in listed solar energy developer SP New Energy Corp. (SPNEC) to develop solar and battery energy storage systems projects.

In a media release on Thursday, MGen Renewable Energy, Inc. (MGreen) said it had signed an investment agreement with SPNEC and its parent firm Solar Philippines Power Project Holdings, Inc. 

“This will be one of the largest solar projects not just in Asia, but in the world,” said Manuel V. Pangilinan, chairman and chief executive officer of Manila Electric Co. (Meralco), the parent firm of the energy developer.

“The Department of Energy’s vision is to have about 35% of the country’s energy come from renewable energy, and this is one of Meralco’s major contributions to this goal,” he added.

Under the agreement, SPNEC will serve as the primary vehicle to develop 3,500 megawatts (MW) of solar panels and 4,000 MW of battery energy storage systems in Luzon.

“We are humbled and grateful for this opportunity to build this renewable energy platform with Meralco. We look forward to bring together Meralco’s capabilities and our solar developments for the benefit of all stakeholders,” SPNEC Chief Executive Leandro L. Leviste said.

To enable investment, MGreen will subscribe to 15.7 billion common shares and 19.4 billion redeemable preferred voting shares in SPNEC.

SPNEC will apply to increase its authorized capital stock to allow the investment. The fresh injection of capital by MGreen will fund the construction and expansion of its solar projects.

Upon closing, MGreen’s common and preferred voting shares will make the company the controlling shareholder of SPNEC with a total voting interest of 50.5%.

Transaction completion is subject to the satisfaction of certain conditions precedent, including relevant regulatory approvals, Meralco said.

Separately, SPNEC told the local bourse on Thursday that its board of directors had approved the increase in its authorized capital stock to 75 billion common shares and 25 billion preferred shares.

Switzerland-based investment bank UBS acted as financial advisor in the transaction while SyCip Salazar Hernandez & Gaitmaitan and Gulapa Law acted as legal advisors to both Meralco and MGreen. King & Spalding and Picazo Law acted as legal advisors to Solar Philippines and SPNEC.

On the stock exchange on Thursday, Meralco’s shares went down by P1 or 0.27% to close at P374 apiece.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

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