SMIC buys stake in CREIT for ₧5B
SM Investments Corp. (SMIC) is acquiring a 28.79-percent stake in Citicore Energy REIT Corp. (CREIT) for P5 billion. On Wednesday, Citicore Renewable Energy Corp. (CREC), together with its wholly owned subsidiary Citicore Solar Tarlac 1 Inc., sold a total of 1,884,374,000 common shares, equivalent to a 28.79-percent interest, in CREIT at P2.6534 per share to SMIC.
CREIT is the largest renewable energy real estate investment trust (REIT) landlord in the country having approximately 7.1 million square meters of gross leasable area.
“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,” CREC President Oliver Tan said in a statement.
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 solar power projects across eight site locations nationwide. CREC’S goal is to build a portfolio of one gigawatt of solar energy capacity per year as part of its five-year pipeline rollout roadmap.
BDO Capital & Investment Corp. acted as transaction adviser for the sale.
“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 Frederic Dybuncio.
The sale comes ahead of CREC’S initial public offering targeted to take place in the second quarter of 2024.
SMIC, the holding firm of the Sy family, reported last month that its net income grew 25 percent to P77 billion in 2023 from the P61.7 billion recorded in 2022.
Consolidated revenues rose 11 percent to P616.3 billion from P553 billion in the previous year.
In terms of net income contribution, banking provided the largest share at 47 percent, while property accounted for 25 percent, retail contributed 19 percent and portfolio investments delivered 9 percent.