Solar Philippines prepares share swap deal with unit

SOLAR Philippines Power Project Holdings Inc. (Solar Philippines), the parent company of listed firm Solar Philippines Nueva Ecija Corp. (SPNEC), said last Thursday it is open for an asset-for-share swap deal with the value favoring its unit.

Solar Philippines said it is ready to swap its 10,000 megawatts (MW) of developments for only three times SPNEC’S current outstanding shares, or 24.37 billion shares.

SPNEC has not yet approved any asset-for-share swap deal, which is subject to a third-party valuation and fairness opinion by an independent financial advisor. SPNEC has also set a stockholders’ meeting on March 7 as it need to seek approval for the increase of its authorized capital stock to 50 billion shares from the current 10 billion. This is required for the proposed issuance of shares in exchange for solar projects.

“We are thankful for the level of interest in SPNEC even as a single pre-operating project. At the same time, we note the feedback that adding our already operating or contracted projects would make SPNEC even more attractive,” Solar Philippines CEO Leandro Antonio L. Leviste said.

“We give this option as an expression of our gratitude to our public shareholders, especially those who believed in SPNEC when it was just P1 per share,” Leviste said.

Solar Philippines said evaluation is still ongoing but it has already reserved the assets for swap with SPNEC shares.

Its portfolio now comprises over 20 solar project companies, which include over 400 MW already operating or under construction. Certain projects are at a similar stage as SPNEC’S 500 MW under development, while others are planned to begin operations a later date given their scale.

SPNEC raised P2.7 billion from its initial public offering, the proceeds of which will be used for the 500-MW Nueva Ecija Solar Farm in 2021, becoming the first pure-play solar company to list at the Philippine Stock Exchange.

To fund the remainder of the 10,000 MW, Solar Philippines is entering into joint ventures with partners and may raise further capital, including a possible stock rights offering if a share swap with SPNEC is approved.

Solar Philippines targets to increase SPNEC’S planned capacity by 20 times while increasing outstanding shares by only five times.

The company acknowledged the importance of responding to the preferences of its public shareholders.

SPNEC has recently been the stock with the highest traded volume on the PSE, with over P7 billion in trading over the past month. SPNEC stock closed last Thursday at P1.60 per share.