Solar Philippines plans P2.7-B IPO in December
Solar Philippines Nueva Ecija Corporation [SPNEC 1.00 pre-IPO] is looking to “capitalize on the increasing demand for renewable energy” by participating in Competitive Selection Processes for renewable energy, pursuing off-take agreements with Retail Electricity Suppliers, and/or selling energy in the Wholesale Electricity Spot Market.” SPNEC “aims to develop an up to 500 MWdc solar power plant in barangays Las Piñas and Sinasajan, Peñaranda, Nueva Ecija (“Project”).
SPNEC plans to commission the Project’s Phase 1A of 50 MWdc by the middle of 2022 (“Phase 1A”) and Phase 1B of 175 MWdc by late 2022 (“Phase 1B”), which would be larger than any solar power plant operating or committed in the Philippines based on the latest figures of the Department of Energy (“DOE”) as of the date of this Prospectus. After Phase 1, SPNEC plans to construct Phase 2 of the Project for up to an additional 275 MWdc for a total 500 MWdc.”
This company has no operating history or track record, and it is seeking an IPO under the Supplemental Listing rules that allow exemptions from operational history requirements for petroleum and renewable energy companies. SPNEC is looking to sell 2.7 billion primary common shares at P1.00/share, to raise P2.7 billion (prospectus). The majority of the money raised will be used to buy land for future expansion, with the rest largely going to fund the “construction and development of Phase 1A”. The number of shares being sold in the offer constitute 33.23% of post-IPO SPNEC. The prospectus said that the company “intends” to maintain an annual dividend ratio of “10% to 30% of net income after tax for the preceding fiscal year.” The IPO will be officially priced on November 23, with the offer period running from December 1 through 7, and listing scheduled for December 17.
MB BOTTOM-LINE
I don’t know how I missed this one on Friday, but I literally just saw this prospectus before publishing MB this morning and I have not had the time to truly dig in to what is going on. That’s why there are so many large quotes above! Anyway, my first take is that I’m happy to see an interesting new IPO like this hit the market, and I look forward to seeing how other companies might copy SPNEC’s approach to get listed and raise additional funding to complete projects. I could see this as a great way for some less-active legacy companies with large land reserves to wrap a joint venture around a parcel of land and convert a memorandum of understanding into something far more tangible for investors. More information to follow!
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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