SPNEC sets P3.3-B stock rights in June


Solar Philippines Nueva Ecija Corporation (SPNEC) has firmed up plans for its stock rights offering (SRO) worth up to P3.3 billion.

In a disclosure to the Philippine Stock Exchange, the firm said it plans to seek regulatory approval for the SRO at an entitlement ratio of one share for every 1.28 shares held from its current public float of P2.4 billion share, for a total of 1.88 billion shares.

The SPNEC SRO shares will be offered at a price range of P1.60 to P1.76 per share with the middle of this range at P1.68 per share which is a 16 percent discount -- with the range being 12-20 percent discount -- to SPNEC stock’s volume-weighted average price over the past two months.

SPNEC’s share price finished up one percent on Monday, March 28, coming from being down 3.5 percent prior to the PSE's disclosure for a 4.5 percent gain on the news, as high volume at the last few minutes made SPNEC the second most highly traded stock for the day.

The average of SPNEC's SRO price range of P1.68 per share is a 17 percent discount to SPNEC's closing price of P2.02 per share, and a 28 percent discount to SPNEC's all-time high of P2.34 per share.

SPNEC is targeting to conduct its SRO in June 2022, subject to the PSE rule that a company can only conduct a new offering after 180 days from its IPO.

The firm said it is now preparing to file its SRO application, after which the timing would be subject to regulatory approval, but no longer subject to an increase in ACS to the extent of its current unissued ACS.

Proceeds from the SRO will be used for the acquisition of land to be used for 4GW of developments, which would form part of the total 10GW of developments that would be funded from further share issuances enabled by SPNEC’s increase in ACS, as detailed in SPNEC’s Comprehensive Corporate Disclosure.

SPNEC is accelerating its timetable for the development of projects of Solar Philippines (SP) amounting to 4GW so it can undertake its planned stock rights offering (SRO) earlier.

It said SP has spent years developing over 10GW of projects, which are subject to SP’s share swap with SPNEC and are reserved for joint ventures with various companies.

This includes over 4GW of developments reserved for its JV with Prime Infra, Terra Solar, for which SP is preparing land and permits that would form part of its investment in these projects.

Terra Solar is the original proponent for an unsolicited proposal to Manila Electric Co. for the supply of 850MW mid-merit for up to 13 hours a day from at least 2.5GW of solar and 4GWh of battery storage, which may be over two times the total installed capacity of solar in the Philippines.

Rather than wait for the effectivity of the increase in authorized capital stock (ACS) and issuance of new shares in exchange for SP’s shares in its JV projects, and in line with approvals already obtained for these, SP would grant SPNEC the option to accelerate the development of the project site using the proceeds of an SRO.

This would support SPNEC in making the first of these projects construction-ready by the end of 2023, so that SPNEC may benefit from these sooner and significantly increase its capacity.

“We note the feedback of our public shareholders who want us to accelerate our business plan, ahead of the consummation of the increase in ACS and share swap,” said Solar Philippines Founder Leandro Leviste

He added that, “As such, we are preparing SPNEC to accelerate the development of our largest projects, from the proceeds of an earlier filed SRO, given the importance of speed in developing projects to meet the growing demand for solar in the Philippines.”

Currently, SPNEC has an ACS of 10 billion shares, of which 8.124 billion shares are outstanding and 1.876 billion are unissued.