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Manila Bulletin devider Business devider The Stock Market devider SMIC buys strategic stake in CREIT for P5 B

SMIC buys strategic stake in CREIT for P5 B

Published Mar 27, 2024 03:35 am

The Sy family’s flagship SM Investments Corporation (SMIC) has come in as a strategic partner in Citicore Energy REIT Corporation (CREIT) with the acquisition of a 28.79 percent stake for P5 billion from shareholders led by billionaire Edgar Saavedra.

In a disclosure to the Philippine Stock Exchange (PSE), CREIT said Philippine-focused pure-play renewable energy company Citicore Renewable Energy Corporation (CREC), together with its wholly owned subsidiary Citicore Solar Tarlac 1 Inc., sold a total of 1.88 billion common shares in the real estate investment trust CREIT.

EDGAR SAAVEDRA photo.jpeg
CREC and CREIT Chairman Edgar Saavedra

The CREIT shares were sold at P2.6534 each, slightly lower than the March 26 close of P2.79 per share. The acquisition was done through a block sale at the opening of trading at the PSE this morning (March 27, 2024).

This is not the first time the SM Group is investing in a firm controlled by Saavedra. The SM Group was a cornerstone investor during the initial public offering of Megawide Construction Corporation which catapulted Saavedra and his partners into the billionaire’s circle. 

The SM Group eventually divested its strategic stake in Megawide, which is one of the contractors of SM Development Corporation’s residential condominium projects.

CREIT is the largest renewable energy REIT landlord in the country having approximately 7.1 million square meters of gross leasable area.

SMIC buys out partners in geothermal firm for P15.73 B
SMIC President and CEO Frederic DyBuncio

“As part of our group-wide sustainability agenda to prioritize environmental responsibility and support a low- carbon economy, we are investing in CREIT to increase SM’s footprint in the renewable energy sector,” said SMIC President and CEO Frederic DyBuncio.

CREC President and CEO Oliver Tan said, “We believe that the SM group’s entry and investment into CREIT and the partnership with CREC unlocks potential synergies given the energy requirements of the SM group.”

Citicore President and CEO Oliver Y. Tan.jpg
CREC President and CEO Oliver Tan 

After the SM acquisition, CREC will continue to be the single largest stakeholder in CREIT with a 32.88 percent effective ownership post-transaction. 

Proceeds from the sale will contribute to the further development of CREC’s 1,583MW ready-to-build and under construction solar power projects across eight site locations nationwide in line with its goal of contributing approximately 1.0GW of solar energy capacity per year as part of its five-year pipeline rollout roadmap.

CREC received its Notice of Approval (NOA) from the PSE approving its application for listing via initial public offering on Jan. 29, 2024, while the Securities and Exchange Commission issued its pre-effective approval on Jan. 17, 2024. CREC is targeting to list its shares on the PSE in or around the second quarter of 2024.
 

Related Tags

Citicore Renewable Energy Corporation Oliver Tan edgar saavedra Frederic DyBuncio Citicore Energy REIT Corp. SM Investments Corporation
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