Meralco unit taking control of top solar firm

MANILA, Philippines — MGen Renewable Energy Inc. (MGreen), the renewable energy development arm of Meralco Powergen Corp. (MGen), has signed a subscription agreement and made an initial payment of P7 billion for its investment in SP New Energy Corp. (SPNEC).

Meralco, in a stock exchange filing, said MGreen and SPNEC have entered into an agreement for the former’s subscription of 15.7 billion common shares and 19.40 billion preferred shares of the latter.

Under the agreement, MGreen made an initial payment of P7 billion to SPNEC, with the balance of P8.89 billion to be paid on the closing date upon fulfillment of certain conditions, including the increase in SPNEC’s authorized capital stock and the amendment of its articles of incorporation.

Meralco in October announced that MGreen would invest P15.9 billion in SPNEC by subscribing to 15.7 billion common shares and 19.4 billion redeemable preferred voting shares of publicly listed integrated developer, owner and operator of solar power projects.

SPNEC is currently majority owned by Solar Philippines Power Project Holdings Inc. (SPH).

MGreen’s common and preferred voting shares will make it the controlling shareholder of SPNEC with a total voting interest of 50.5 percent upon closing of the transaction.

MGreen’s investment in SPNEC will fund the construction and expansion of the latter’s solar projects.

MGreen has agreed with SPH 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, which will be one of the largest solar projects in the world.

Meralco chairman and CEO Manuel V. Pangilinan earlier said the company is looking to complete its acquisition of a controlling stake in SPNEC before the year ends.

MGen, through MGreen, has initially set its sights on reaching 1,500 MW of renewable energy capacity by 2030.

It has committed to investing at least P18 billion to put up over two gigawatts of gross renewable energy capacity from solar and wind which the company will build through 2030 along with its various partners.