Solar Philippines Nueva Ecija Corporation (SPNEC) has approved a P60.9-billion asset-for-share swap with its parent company Solar Philippines Power Project Holdings, Inc. (SPPPHI).
In a disclosure to the Philippine Stock Exchange, the firm said the swap involves the acquisition of 100 percent of the outstanding shares of SPPPHI and its affiliates in over 20 entities.
The Solar Philippines assets would be acquired through an asset-for-share swap in exchange for 24.37 billion shares of SPNEC at an issue price of P2.50 per share.
This share swap is supported by a third-party valuation and fairness opinion by FTI Consulting Philippines, Inc., an independent financial advisor accredited with the Securities and Exchange Commission and PSE.
FTI’s track record in valuing renewable energy companies includes having done the valuation for AC Energy’s share swap at P2.37 per share in 2019, prior to AC Energy’s stock price rising to as high as P13 per share.
“While we could have issued shares in exchange for the Solar Philippine assets relative to SPNEC’s existing shares at a ratio of 5-to-1, we have opted for a ratio of only 3-to-1, resulting in less dilution and greater value per share,” said Solar Philippines founder Leandro Leviste.
He added that, “We have done so to share more upside with our public shareholders, who we consider to be our partners in building this company for the long term.” This share swap would be enabled by the increase in authorized capital stock for approval at SPNEC’s Stockholder’s Meeting set for March 7 2022, and is subject to regulatory approvals.
Once completed, SPNEC would own shares in companies including: Solar Philippines Calatagan Corporation; Solar Philippines Tarlac Corporation; Solar Philippines Tanauan Corporation; Terra Solar Philippines, Inc.; SP Holdings, Inc.; Solar Philippines Batangas Baseload Corporation; Solar Philippines Central Luzon Corporation; Solar Philippines South Luzon Corporation; Solar Philippines Visayas Corporation; Solar Philippines Retail Electricity, Inc.; Solar Philippines Rooftop Corporation; and Solar Philippines Commercial Rooftop Projects, Inc.
According to the list of Awarded Solar Projects as of Dec. 31, 2021 published on the Department of Energy (DOE) website, these entities hold 33 DOE Solar Energy Service Contracts (SESC’s) with an operational capacity of 169.36 MW and capacity under development of 14,395.03 MW, or over two thirds of the total 21,302.32 MW across all DOE SESC’s in the Philippines.
This is in line with SPNEC’s goal to develop 10 GW of solar projects, representing a 20-fold increase in its targeted capacity in exchange for the issuance of only three times its currently outstanding shares.