In a stock exchange filing on Thursday, Meralco said unit MGEn Renewable Energy Inc. extended a P6.7 billion convertible loan to Solar Philippines Power Project Holdings, owned by businessmen Leandro Leviste, the founder and minority stockholder of SPNEC.
The amount is exchangeable to 5.8 billion SPNEC shares after the loan matures in a year.
Meralco clarifies partner
Meralco clarified a statement posted on Solar Philippines’ Facebook page the previous day, which announced the energy giant’s purchase of shares.
The stated amount on Facebook was also larger at P7.5 billion since this included an additional P800 million payout to Solar Philippines after SPNEC completes the sale of a stake in its massive Terra Solar project to potential foreign parties.
Meralco did not mention the P800 million payout in its disclosure.
Speculation drives up SPNEC price
Investment rumors helped fuel a 26.5 percent share price rally at SPNEC over the past month. Shares reached P1.29 each on Thursday, which is the implied value of the P7.5 billion share purchase.
SPNEC shares opened at P1.30 each on Thursday, and are trading at around P1.29 apiece minutes after the open as investors digested the news.
Analyst view
AP Securities research head Alfred Benjamin R. Garcia sees limited impact from the share purchase deal in SPNEC but anticipates a more significant shift once a foreign investor enters Terra Solar.
“Given the immaterial impact of this deal on MER [Meralco’s] financials, and the continued uncertainty over its franchise and rate rebasing, we maintain our hold rating on MER with a TP [target price] of P351.25 which is below the consensus TP of P430.41,” he said on Thursday.
“We also maintain our cautious stance on SPNEC until it secures funding for Terra Solar,” he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
