SPNEC building war chest for MGEN Renewables merger

MANILA, Philippines — SP New Energy Corp. (SPNEC) is gearing up for its merger with parent MGEN Renewable Energy Inc., arming itself financially for the transaction expected to complete in the fourth quarter.

In a stock exchange filing yesterday, SPNEC said its board of directors approved a budget for the planned asset infusion with its parent company, although the amount was not disclosed.

“The budget covers the engagement of professional advisors who will advise management on the transactions contemplated under the proposed asset injection,” the company added.

The fourth-quarter consolidation, first reported by The STAR, is expected to pave the way for a re-initial public offering (IPO) in March 2027.

MGEN president and CEO Emmanuel Rubio earlier said the valuation had already been finalized, with both companies now preparing for the transaction.

Following the merger, MGEN Renewable Energy Holdings Inc., the proposed new corporate name of SPNEC, will emerge as the surviving entity.

As previously disclosed, the re-IPO was intended to coincide with the target completion of Phase 2 of the P200-billion MTerra Solar project straddling Nueva Ecija and Bulacan.

The project, consisting of a 3,500-megawatt solar farm equipped with a 4,500-MW battery energy storage system component, started injecting 250 MW into the grid last March.

Upon full completion in 2027, the multibillion-peso project is poised to become the largest integrated solar and battery storage in the world.

It will deliver 850 MW of mid-merit capacity to utility giant Manila Electric Co. under a 20-year power supply agreement.

Unicapital Inc. equity research analyst Peter Garnace said the consolidation of the Meralco Group’s RE assets will not only broaden its portfolio but also improve income visibility and project concentration risk.

“In our view, the transaction could also drive a valuation re-rating, as investors begin to view SPNEC less as a single-project development story and more as a scale, pure-play RE platform with diversified assets and recurring cash flows,” Garnace added.

The Meralco Group took over SPNEC in 2023 after acquiring a majority stake from Solar Philippines, the company that made businessman-turned-politician Leandro Leviste the country’s youngest self-made billionaire.