SPNEC shareholders approve capital hike, asset-for-share swap

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Shareholders of Solar Philippines Nueva Ecija Corp. (SPNEC) have formally approved the increase in its authorized capital stock to 50 billion shares from 10 billion shares, as well as the asset-for-share swap.

The move will make SPNEC – the publicly-listed firm of Solar Philippines – be the parent firm of various solar projects owned by Solar Philippines itself.

Under the swap, SPNEC will be issuing 24.37 billion worth of shares at Php2.50 per share in exchange for the parent company, Solar Philippines’ shares in over 20 companies – including the solar farms in Calatagan, Batangas; Concepcion, Tarlac; and Cavite. 

The company is looking to establish a one gigawatt (GW) operating portfolio by 2023, and expand to 10GW to create Php15 million per megawatt of value by 2025. 

Once the asset-for-share swap is completed, SPNEC will now own shares in companies that hold 33 Solar Energy Service Contracts with the Department of Energy (DOE) with an operational capacity of 169.36 megawatts (MW), and a capacity of 14,395.03 MW under development. This is equivalent to two-thirds of all DOE-awarded solar projects as of end-2021.

SPNEC has laid out three strategies to reach its 10GW goal.

First, it will focus on being a project developer instead of becoming an independent power producer (IPP).

“We believe the greatest challenge for solar in the Philippines is neither a lack of demand nor a surplus of projects, but rather, the challenge of consolidating land and permits that has resulted in a shortage of developed solar sites,” SPNEC said.

Second, the company would enter into partnerships with IPPs, though Solar Philippines has reserved the largest share of the 10GW for Terra Solar – its joint venture with Enrique Razon’s Prime Infra – which will be using the first 1,000 hectares being acquired by SPNEC. Terra Solar recently made an unsolicited offer to the Manila Electric Company (MERALCO) to provide 850MW of mid-merit power over 20 years.

Third is SPNEC’s planned Php10 billion stock rights offering (SRO), as well as possible private placements and follow-on offerings. The company aims to file the SRO by the second quarter.