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Friday, March 29, 2024

SPNEC swap deal to benefit shareholders

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Solar Philippines Nueva Ecija Corp. said over the weekend the terms of the proposed asset-for-share swap agreement will result in less dilution and greater value per share for investors.

SPNEC disclosed plans to acquire Solar Philippines’ assets through an asset-for-share swap. Solar Philippines, SPNEC’s parent, will subscribe to 24.373 billion shares in SPNEC at P2.50 apiece, while Solar Philippines will transfer the assets held by 20 affiliates to SPNEC.

“While we could have issued shares in exchange for the Solar Philippine assets relative to SPNEC’s existing shares at a ratio of 5-to-1, we have opted for a ratio of only 3-to-1, resulting in less dilution and greater value per share,” said Solar Philippines founder Leandro Leviste.

“We have done so to share more upside with our public shareholders, who we consider to be our partners in building this company for the long term,” Leviste said.

The Philippine Stock Exchange suspended trading of SPNEC shares Monday, pending the submission of additional information on the planned asset-for-share swap agreement with Solar Philippines Power Project Holdings Inc. and its affiliates in various entities.

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The PSE said in a notice it would require SPNEC to submit a full and comprehensive disclosure on the transaction, business impact and material implications of the transaction on the company and its financial condition.

“In view of the foregoing and subject to the company’s compliance, the exchange will implement a trading suspension on SPNEC shares effective at 9 a.m. on Monday, February 28, 2022,” the PSE said.

Leviste said the asset-for-share swap agreement was in line with SPNEC’s goal to develop 10 gigawatts of solar projects, representing a 20-fold increase in its targeted capacity in exchange for the issuance of only three times its outstanding shares.

The 20 entities involved in the transaction hold 33 Department of Energy solar energy service contracts with an operational capacity of 169.36 megawatts and capacity under development of 14,395.03 MW.

This is equivalent to over two thirds of the total 21,302.32 MW across all DOE SESCs in the Philippines.

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