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Manila Bulletin devider Business devider MGreen makes first payment in SPNEC takeover

MGreen makes first payment in SPNEC takeover

Published Dec 1, 2023 03:55 am

At A Glance

  • MGen Renewable Energy, Inc. (MGreen) has taken steps towards acquiring SP New Energy Corp. (SPNEC) by making an initial investment, signaling a potential change in the ownership structure of SPNEC.<br>SPNEC recently received an initial payment of P7 billion from MGreen as part of a substantial P15.9 billion investment, marking progress in the financial aspect of the acquisition.<br>The remaining balance of P8.89 billion is expected to be settled by the closing date, paving the way for the completion of the investment and the potential transfer of control to MGreen.<br>Upon the completion of the investment, MGreen will secure a significant voting interest of 50.5 percent in SPNEC, granting it substantial influence over corporate decisions and strategic direction.<br>Additionally, SPNEC has sought to expand its financial capacity by applying for an increase in authorized capital stock, a move intended to accommodate the capital injection from MGreen.<br>SPNEC's expansion plans include the development of 3,500 megawatts (MW) of solar panels and 4,000 megawatt-hours of battery energy storage systems in Luzon, highlighting the company's commitment to renewable energy and sustainable infrastructure development.

The unit of power distributor Manila Electric Co. (Meralco) has completed its initial investment, laying the groundwork for its prospective takeover of SP New Energy Corp. (SPNEC).

In a disclosure to the Philippine Stock Exchange on Friday, Dec. 1, SPNEC said the Leviste-led firm has received P7 billion last Nov. 30 from MGen Renewable Energy, Inc. (MGreen) as an initial payment towards its P15.9 billion investment.

To recall, MGreen had entered into an agreement with SPNEC last October to acquire 15.7 billion common shares and 19.4 billion redeemable preferred shares.

SPNEC said the remaining balance of P8.89 billion will be made by the closing date.

“The Subscription Shares are to be issued by the Closing Date, subject to the approval of SPNEC’s increase in authorized capital stock," the company told the bourse.

Once fully paid, MGreen will have a 50.5 percent voting interest in SPNEC, giving the renewable energy development arm of Meralco Powergen Corp. (MGen) significant influence over corporate decisions.

Earlier, Manuel V. Pangilinan, Meralco chairman and chief executive officer, said their goal is to finalize the SPNEC acquisition before the year's end.

SPNEC has applied for an increase in authorized capital stock to facilitate MGreen's infusion of fresh capital, which will be utilized to finance the construction and expansion of its solar projects.

Specifically, the company plans to develop 3,500 megawatts (MW) of solar panels and 4,000 megawatt-hours of battery energy storage systems in Luzon.

“This will be one of the largest solar projects not just in Asia, but in the world. The Department of Energy’s vision is to have about 35% of the country’s energy come from renewable energy, and this is one of Meralco’s major contributions to this goal,” Pangilinan said.

Leandro Leviste, CEO of SPNEC, had said the new investment of MGreen will synergize his company’s project development potential with that of Meralco to bring the targeted RE installations to commercial fruition.

“We look forward to bring together Meralco’s capabilities and our solar developments for the benefit of all stakeholders,” he stressed. (Gabriell Christel Galang)

Related Tags

renewable energy SP New Energy Corporation Manila Electric Co. (Meralco)
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