Metro Pacific invests P2B in Leandro Leviste’s solar power firm

Metro Pacific Investments Corp chair and president Manuel V. Pangilinan and Solar Philippines founder and CEO Leandro Leviste shake hands after signing the share purchase agreement. 

MANILA  -Tycoon Manuel V. Pangilinan-led Metro Pacific Investments Corp. is buying into businessman Leandro Leviste’s SP New Energy Corp., announcing on Tuesday  the infusion of a P2-billion investment in the company plus an option that could make it the solar energy startup’s single largest shareholder.

In a stock exchange filing on Tuesday, Metro Pacific said it signed definitive agreements to acquire 1.6 billion common shares or a 16 -percent stake in SP New Energy, which is aggressively raising money to bankroll an ambitious pipeline of solar power projects.

Solar Philippines aims to build world’s largest solar farm

Pangilinan will also replace Leviste, son of Sen. Loren Legarda, as chair of SP New Energy. Leviste will remain president and CEO of the company.

“Our thrust of pursuing renewable energy brings the MVP Group one step closer to fulfilling our mission of creating long-term value for our stakeholders through responsible and sustainable investments,” Pangilinan, chair and CEO of Metro Pacific, said in the filing.

He joins other tycoons that have partnered with the company such as the Zobel family’s ACEN Corp. and Enrique Razon Jr.’s Prime Infrastructure.

Metro Pacific is buying the shares from Leviste’s holding company, Solar Philippines Power Project Holdings Inc., which will use the proceeds to fund land investments for its planned 2,000-hectare solar farm venture in Nueva Ecjia under Terra Solar Philippine Inc., a venture with Razon.

Metro Pacific is buying the shares at P1.25 each, a 25 percent discount to the company’s closing price before the transaction was announced.

Shares of SP New Energy rose 3.57 percent to P1.74 each while Metro Pacific climbed 4.09 percent to P3.82 per share on Tuesday.

Metro Pacific also obtained an option to acquire more shares of SP New Energy after the latter completes an asset for share swap with Solar Philippines Power Project Holdings.

Metro Pacific said the option allows it to acquire up to 43 percent of company.

In the filing, Leviste described the entry of Metro Pacific as the “key to unlock the potential of our project pipeline.”

“We are humbled and grateful for this opportunity, and believe that [SP New Energy] now has the final ingredients to realize the value of our developments for the benefit of all stakeholders,” he said.

The deal gives Metro Pacific direct exposure to the renewable energy sector apart from its indirect interests through one of its portfolio companies, energy distribution giant Manila Electric Co. (Meralco).

Meralco also has ties with Leviste’s group after signing earlier a 20-year power supply agreement (PSA) with Terra Solar for the supply of 850 Megawatts of energy starting in 2026.

An analyst said the decision to use Metro Pacific as the investment vehicle instead of Meralco might make the deal more acceptable to regulators due to the PSA.

“[W]e do not know how the [Energy Regulatory Commission] and [Philippine Competition Commission] will view the transaction should [Meralco] have been the one who purchased the minority stake in [SP New Energy],” Adrian Yu, head of institutional sales at stockbrokerage house COL Financial Group, told the Inquirer.

Yu said the group could eventually consolidate its investment in SP New Energy under Meralco.

This was similar to the Metro Pacific acquisition of Global Business Power Corp. in 2016 before it was transferred to a Meralco subsidiary after four years.

Metro Pacific said said in the filing on Tuesday the investment was in line with the Department of Energy’s target to raise renewable energy output to 35 percent by 2030.