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Stock Commentary

Solar Philippines extends SRO 'payment plan' deadline

Merkado Barkada
Solar Philippines extends SRO 'payment plan' deadline

Solar Philippines [SPNEC 1.4 4.9%] [link] disclosed that it has extended the deadline for the “payment plan” SRO buyers by three months.

The new deadline is March 5, 2023.

Under the SPNEC SRO payment plan, SRO buyers were able to opt to pay only a 25% down payment for their SRO shares, with the 75% balance due (originally) today.

The price of the SRO shares was P1.50, and the current market price of SPNEC is 10% lower at P1.35. SPNEC has been down 20% or more from that SRO price for large portions of the payment period.

According to its Friday disclosure, 712 million of the 1,875 million shares that were sold had not been fully paid.

MB BOTTOM-LINE

SPNEC reserved the right to treat “delinquent” buyers (their words, not mine) by either extending the final payment deadline, or by pocketing their deposit and auctioning off the delinquent shares, so anyone that hasn’t paid for their shares yet should be thankful that SPNEC hasn’t picked the nuclear option (yet).

Still, it’s no wonder SPNEC extended the deadline: nearly 38% of the entire SRO’s shares are still unpaid and unclaimed.

That’s around P800 million worth of additional payments that SPNEC has to wring out of the buyers over the next quarter.

That’s not insignificant. But what is SPNEC’s best move here?

Simply put: get good. Raise the stock price up above the SRO price. Give buyers a financial incentive to complete the trade.

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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.

PHILIPPINE STOCK EXCHANGE

SOLAR PHILIPPINES

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