Solar Philippines Nueva Ecija Corporation (SPNEC) is raising P10 billion from the capital market, including a planned stock rights offering (SRO), to complete its development of 10 GW of solar projects.

In a disclosure to the Philippine Stock Exchange, the firm said its Board of Directors has approved the conduct of a SRO where eligible stockholders would have the opportunity to subscribe to shares, subject to terms to be determined by management and relevant requirements and regulatory approvals.

The company plans to file the application for the SRO in the second quarter of 2022, from which point the SRO’s timing would depend on regulatory approvals.

SPNEC said it may also raise more capital from private placements with institutional investors, to complete the capital required for the company’s expansion plans.

“We need at least P10 billion to complete the development of 10 GW of solar projects. This is only a small percent of project cost, but we believe is a large percent of the value, with development being the bottleneck for the energy transition of the Philippines,” said Solar Philippines Founder Leandro Leviste.

He added that, “As a developer, SPNEC’s business model is to make projects shovel-ready, then bring in joint-venture partners who can help fund the construction.”

“That said, we could also invest a much larger amount, and would take the opportunity to raise such if this is seen to be accretive to shareholders,” Leviste noted.

SPNEC also approved the acquisition of land as part of its developments, to be funded from proceeds of the SRO and proceeds from its IPO.

The company’s developments are located primarily in the provinces of Nueva Ecija, Bulacan, Tarlac, Batangas, and Quezon, where its parent, Solar Philippines has spent the past years consolidating land suitable for solar in relative proximity to the Greater Manila Area.

These developments would be supported by a potential asset-for-share swap between SPNEC and Solar Philippines, which has a portfolio of over 20 solar project companies, including over 10 GW in development according to DOE figures.

SPNEC has not yet approved any asset-for-share swap, which is subject to a third-party valuation and fairness opinion by an independent financial advisor.

The proposed fundraisings and asset-for-share swap are part of SPNEC’s plan to increase its authorized capital stock to 50 billion shares, subject to approval at a Stockholder’s Meeting set for March 7 2022.