The renewable energy division of Meralco has allocated almost P16 billion for controlling SPNEC.

Meralco PowerGen Corporation’s subsidiary focused on renewable energy is allocating P15.9 billion to acquire shares in SP New Energy Corporation, a publicly traded company that specializes in solar energy. This investment will be used for the development of solar and battery energy storage system projects.

On Thursday, MGreen announced that it had entered into an investment agreement with SPNEC and its parent company, Solar Philippines Power Project Holdings, Inc.

Manuel V. Pangilinan, the chairman and CEO of Manila Electric Co. (Meralco), the parent company of the energy developer, stated that this project will be one of the biggest solar ventures not only in Asia but globally.

The Department of Energy has a goal for 35% of the nation’s energy to be from renewable sources, and this is a significant contribution from Meralco, according to the speaker.

SPNEC will be responsible for developing 3,500 MW of solar panels and 4,000 MW of battery energy storage systems in Luzon under the terms of the agreement.

“We are honored and appreciative to have the chance to create a renewable energy platform with Meralco. We are excited to combine Meralco’s strengths with our solar projects for the betterment of all involved,” stated Leandro L. Leviste, CEO of SPNEC.

MGreen plans to purchase 15.7 billion regular shares and 19.4 billion preferred voting shares in SPNEC in order to facilitate investments.

SPNEC plans to raise its authorized capital stock in order to receive the investment. MGreen’s new capital infusion will finance the development and expansion of its solar projects.

After the finalization, MGreen’s regular and preferred shares will give the company majority control of SPNEC, with a combined voting stake of 50.5%.

Meralco stated that completing the transaction is dependent on fulfilling specific requirements, such as obtaining necessary regulatory approvals.

SPNEC announced on Thursday that its board of directors had authorized an increase in the company’s capital stock to 75 billion common shares and 25 billion preferred shares.

UBS, a Swiss investment bank, provided financial advice for the deal, while SyCip Salazar Hernandez & Gaitmaitan and Gulapa Law served as legal advisors for both Meralco and MGreen. King & Spalding and Picazo Law acted as legal advisors for Solar Philippines and SPNEC.

Meralco’s stock experienced a decrease of P1 or 0.27% on Thursday’s market, closing at P374 per share.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

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