Meralco’s expertise may speed up SPNEC’s solar projects — analysts

THE leadership of Manuel V. Pangilinan (MVP), chairman and chief executive officer (CEO) of Manila Electric Co. (Meralco), may expedite the development of projects at SP New Energy Corp. (SPNEC), analysts said.

“Meralco’s vast experience and financial resources can boost SPNEC’s project execution and scale. Pangilinan’s leadership brings added credibility and investor confidence,” Toby C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.

On Wednesday, SPNEC said MGen Renewable Energy, Inc. (MGreen) had given the balance payment of about P8.89 billion to complete the P15.9-billion investment for control of the listed company.

MGreen is the renewable energy development arm of Meralco Powergen Corp., a wholly owned subsidiary of Meralco.

After the transaction, MGreen will own 15.7 billion common shares and 19.4 billion preferred shares in SPNEC, translating to a total voting interest of 50.5%.

At the same time, SPNEC announced the appointment of Mr. Pangilinan as chairman, president, and CEO of the company, and Leandro Antonio L. Leviste as vice-chairman.

Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message that the acquisition “comes with the overarching strategy of the group to build a portfolio that is more focused on renewables.”

SPNEC is building one of the largest single contracted solar projects in the world in Nueva Ecija, with its 3.5-gigawatt solar farm and 4.5-gigawatt-hour battery energy storage project.

Mr. Arce said Meralco’s backing could expedite land acquisition, financing, and construction, “bringing the world’s largest solar project closer to reality.”

“Pangilinan’s takeover brings both opportunities and challenges for SPNEC. The company’s future direction, success of the Nueva Ecija project, and impact on the renewables market will depend on effectively harnessing the combined strengths of Meralco and SPNEC,” Mr. Arce said.

Meanwhile, Globalinks Senior Trader Mark V. Santarina said Mr. Pangilinan as the chairman of SPNEC is “a win-win for everyone” through the leverage of Meralco’s expertise in the energy sector. 

“While there’s potential for a backdoor listing of MGreen since they now control SPNEC, it doesn’t seem likely to happen soon,” he said in a Viber message.

Mr. Santarina said that the takeover significantly benefits Meralco as it plays “a key role in the company’s current stock trading at its 52-week high.”

“This is attributed in part to Meralco’s commitment to integrating an increasing amount of renewable energy into its overall energy portfolio,” he said.

At the local bourse on Thursday, shares of SPNEC climbed by 10 centavos or 8% to close at P1.35 apiece. Meralco shares went up by P5 or 1.27% to finish at P398 each. — Sheldeen Joy Talavera