Tycoon Enrique K. Razon’s Prime Infrastructure Inc. has agreed to restructure its partnership with Leandro Leviste’s Solar Philippines Power Project Holdings, Inc. (SP) that involves three joint venture companies.
In a disclosure to the Philippine Stock Exchange, SP said it has entered into a Memoranda of Agreement (MOAs) with Prime Infrastructure on the way forward for their joint ventures (JV) in Terra Solar Philippines, Inc. (TSPI), Solar Tanauan Corporation (Solar Tanauan), and Solar Philippines Tarlac Corporation (Solar Tarlac).
The MOAs include Amendments to the Shareholders’ Agreement of TSPI between SP and Prime to streamline the decision-making process and reach agreements efficiently and commercially via deadlock resolution mechanisms.
On this basis, the parties agreed to continue their JV in TSPI. TSPI has signed a 850 MWac Mid-Merit Power Supply Agreement (PSA) with Meralco with a scheduled delivery date by the first quarter of 2026, and plans to break ground within 2023.
The agreements also calls for the sale of common shares in Solar Tanauan by SP to Prime for P1 billion upon execution of the agreements, which would result in Prime owning 100 percent of Solar Tanauan.
Proceeds of this sale will go to SP New Energy Corporation (SPNEC) after it swaps new shares for SP’s assets. Solar Tanauan has a PSA with Meralco for 50 MWac, has secured over 140 hectares of land, and is currently under construction.
Also part of the MOAs is the redemption or purchase of preferred shares in Solar Tarlac of Prime by Solar Tarlac or SP for P1.5 billion plus accrued dividends by or before March 31, 2024.
This, with additional equity, would result in SP (or SPNEC after the share swap) owning 100 percent of Solar Tarlac. Solar Tarlac has a PSA with Meralco for 85 MWac, has secured over 140 hectares of land, and currently has 100 MW operating and 50 MW under construction.
The terms of the MOAs will apply to SPNEC upon the completion of its share swap with SP.
“With these agreements, SP and Prime have agreed to focus the efforts of their JV on TSPI, in recognition of the value in working together for the success of the Terra Solar project,” SPNEC said.