Meralco takes majority control of SPNEC

MANILA  -A unit of power distributor Manila Electric Co. (Meralco) will inject P15.9 billion into renewable energy firm SP New Energy Corp. (SPNEC) via share subscription, making it the controlling shareholder of Leandro Leviste’s company.

In a statement on Thursday, Meralco said MGen Renewable Energy Inc. (MGreen) had signed an agreement with SPNEC to subscribe to 15.7 billion of the latter’s common shares, as well as 19.4 billion redeemable preferred shares.

This gives MGreen a total voting interest of 50.5 percent in SPNEC. A shareholder with controlling interest in a business gives it the deciding voice in shareholder meetings, thus holding significant influence over corporate decisions.

The investment of MGreen, Meralco’s renewable energy development arm, will be used to fund the construction and expansion of SPNEC’s solar projects, the distributor said.

MGreen agreed with parent company Solar Philippines Power Project Holdings Inc. to use SPNEC as the primary vehicle to develop 3,500 megawatts (MW) of solar panels and 4,000 megawatt-hours of battery energy storage systems in Luzon.

READ: SPNEC secures 4,000 hectares of land for solar farm development

“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 35 percent of the country’s energy come from renewable energy, and this is one of Meralco’s major contributions to this goal,” said Meralco chair and chief executive Manuel Pangilinan.

To enable MGreen’s investment, SPNEC said in a stock exchange disclosure that it would file an application to increase its authorized capital stock from 50 billion common shares to 75 billion common shares and 25 billion preferred shares.

The number of SPNEC’s directors will also be increased from seven to nine.

“We look forward to bring together Meralco’s capabilities and our solar developments for the benefit of all stakeholders,” said SPNEC CEO Leviste.

READ: SPNEC to break ground on ‘world’s largest solar farm’ this year

To recall, Leviste announced in January this year that they planned on securing land in Nueva Ecija and Bulacan provinces for the development of what SPNEC expected to be the world’s largest solar farm.

In August, Leviste said his company had secured over 4,000 hectares of land for the 3,500-MW solar farm.

He explained that 3,000 ha were secured through deeds of sale, while the rest was acquired through contracts to lease.

Leviste, who founded SPNEC in 2013, earlier told reporters that the solar farm needed to be operational by 2026 as part of SPNEC’s goal of expanding its portfolio capacity to 10 gigawatts.

SPNEC had said that it intended to spend P400 billion to achieve this portfolio expansion goal. The company’s portfolio currently includes over 400 MW of projects. INQ 

—Meg J. Adonis