Solar Philippines NEC Buying $1.2 Billion Worth Of Power Generation Assets From Parent

Solar Philippines Nueva Ecija Corp. is acquiring stakes in more than 20 solar power generation projects across the Philippines, valued at 60.9 billion pesos ($1.2 billion), from its parent in an all-share deal that will transform the company into one of the country’s biggest renewable energy producers.

Under the deal approved by its shareholders this week, Solar Philippines NEC will issue 24.4 billion new shares to its controlling shareholder Solar Philippines Power Project Holdings Inc. at 2.50 pesos apiece, in exchange for its parent’s stakes in more than 20 solar electricity generating assets across the country. These assets can produce up to 10 gigawatts of electricity, accounting from more than two-thirds of service contracts already awarded by the Department of Energy, Solar Philippines NEC said in a regulatory filing on Monday.

Shares of Solar Philippines NEC has doubled in value since its initial public offering in December as the company unveiled expansion plans in recent weeks. The company raised 2.7 billion pesos from its IPO to fund the development of its first solar farm in the Nueva Ecija province, north of Manila. To be built in three phases, the solar farms can produce up to 500 megawatts when fully built.

Solar Philippines Power, which is controlled by Leandro Leviste, a Forbes Asia 30 Under 30 alumni, will increase its stake in Solar Philippines NEC to 91.7% from 66.8% once the share swap is completed by the middle of the year, the company said. Following the completion of the share swap, Solar Philippines NEC plans to raise 10 billion pesos in a secondary rights offering to fund the development of the solar projects it is acquiring from its parent company.

“We need at least 10 billion pesos to complete the development of 10 gigawatts of solar projects,” Leviste said in a statement recently. “This is only a small percent of project cost, but we believe is a large percent of the value, with development being the bottleneck for the energy transition of the Philippines.”

Leviste, 28, founded Solar Philippines in 2013, spending about $100 million dollars in bank loans arranged through family connections as well as profits from the sale of his shares in Tesla Motors that he had bought while attending Yale University in the U.S. His mother, Loren Legarda, is the deputy of speaker of the House of Representatives, while his father, Antonio Leviste, was the former governor of Batangas province, south of Manila.

“As a developer, Solar Philippines NEC’s business model is to make projects shovel-ready, then bring in joint-venture partners who can help fund the construction,” Leviste said. “That said, we could also invest a much larger amount, and would take the opportunity to raise such if this is seen to be accretive to shareholders.”