SP New Energy Corp. (SPNEC) has acquired 100% of the shares of Prime Infrastructure, Inc. (Prime Infra) in Terra Solar Philippines, Inc. (TSPI) for Php 6 billion.

In a disclosure to the Philippine Stock Exchange, SPNEC said that it has already executed a Deed of Absolute Sale to acquire the shares from Prime Infra. Together with SPNEC’s shares in TSPI acquired from Solar Philippines, SPNEC is now the owner of 100% of TSPI.

TSPI was established in 2020 as a 50-50 joint venture between SPNEC parent Solar Philippines and Prime Infra to develop a 3.5 GW solar and 4 GWh battery storage project, which has been referred to as the world’s largest solar project.

SPNEC’s developments are supported by the agreement signed between MGen Renewable Energy (MGreen), Solar Philippines, and SPNEC on October 12 2023 for a Php 15.9 billion investment. Upon closing, MGreen will own 15.7 billion common shares and 19.4 billion preferred shares of SPNEC, translating to a total voting interest of 50.5%.

MGreen is the renewable energy development arm of Meralco Powergen Corporation, a wholly-owned subsidiary of the Manila Electric Company, the country’s largest private sector electric distribution utility company. SPNEC is currently majority-owned by Solar Philippines.

The SPNEC made the announcement to acquire 100 % of Terra Solar Philippines, Inc. after the Philippine Stock Exchange has lifted the suspension on the trading of the shares of SP New Energy Corporation last December 1, 2023 after the firm reported that its public float has been raised to 20.02 percent to meet the minimum public ownership requirement of 20 percent.

The public now owns 6.88 billion SPNEC shares with non-public shares amounting to 27.49 billion shares. Substantial shareholders are Leandro Leviste’s Solar Philippines Power Project Holdings Inc. (69.79 percent) and Metro Pacific Investments Corporation (4.65 percent).

SPNEC’s public ownership fell below 20 percent after the approval of its increase in authorized capital stock from 10 billion to 50 billion shares, to support the expansion of its project portfolio.

Last June 2, 2023, the PSE ordered the suspension of the trading of the SPNEC shares after the “Company’s public ownership level fell below 20 % prescribed minimum percentage.”

Pursuant to the Guidelines on Minimum Public Ownership Requirement for Initial and Backdoor Listing dated August 3, 2020, the SPNEC is required to have at least 20 % public float.

“In view of the abovementioned issuance, the Company’s public ownership level fell below the 20 % prescribed minimum percentage,” the PSE stressed.

Under the Amended Rule on Minimum Public Ownership of the Exchange (the “Amended MPO Rule”), listed companies which become non-compliant with the prescribed minimum public ownership “shall be suspended from trading for a period of not more than six (6) months and shall be automatically delisted if it remains non-compliant with the MPO after the lapse of the suspension period.”

“Given the foregoing and pursuant to the Amended MPO Rule and the relevant guidelines, the trading of SPNEC shares will be suspended effective June 2, 2023. Further, should the Company remain non-compliant with the minimum public ownership requirement after the lapse of the six (6)-month period from June 2, 2023, SPNEC shall be automatically delisted from the Official Registry of the Exchange,” the PSE said, in its order.

“The Exchange will inform the Trading Participants and the investing public of further developments on the matter,” it added.

The PSE was prompted by the SPNEC’s June 2, 2023 filing by the company pertaining to the approval by the Securities and Exchange Commission of, among others, the increase in its authorized capital stock from One Billion Pesos (Php1,000,000,000.00) divided into 10 billion common shares at par value of Php0.10 per share to Five Billion Pesos (Php5,000,000,000.00) divided into 50 billion common shares at par value of Php0.10 per share.

On February 24, 2022, the Company’s Board of Directors approved the acquisition of 100% of the outstanding shares of Solar Philippines Power Project Holdings, Inc. (“SPPHI”) in various entities (“Solar Philippines Assets”), through an asset-for-share swap, with SPPHI subscribing to 24,373,050,000 SPNEC shares at Php 2.50 per share (“Share Swap”) in exchange for the Solar Philippines Assets.

Subsequently, in separate disclosures made on May 8 and 16, 2023, SPNEC has disclosed the board approval and the execution of the Contract to Sell, respectively, relative to the acquisition by SPNEC of 100% of the Solar Philippines Assets. The acquisition will be paid in cash from the proceeds of SPPPHI’s subscription to SPNEC shares to be sourced from the increase in SPNEC’s capital stock, in lieu of a tax-free share swap.

Meanwhile, Manila Electric Co signed a 20-year Power Supply Agreement with SPNEC’s Terra Solar Philippines for the supply of 850 megawatts (MW) of renewable energy to cover the power distributor’s mid-merit requirement starting 2026.

The PSA provides that a total of 600 MW of power supply will be available by Feb 26, 2026, while additional 250 MW will be delivered starting Feb 26, 2027 at a headline and levelized cost of electricity (LCOE) rate of P5.80 per kilowatt-hour, which was based on assumptions at the time when the competitive challenge for the unsolicited proposal was launched.