Solar PHL unit IPO 2x oversubscribed

The initial public offering (IPO) of Solar Philippines Nueva Ecija Corp. (SPNEC), a unit of Solar Philippines Inc., was almost two times oversubscribed ahead of its market debut by the end of the week, according to its underwriter.

“SPNEC’s IPO was oversubscribed, receiving P5.3 billion in orders for the P2.7-billion offering, with strong demand from investors who want exposure to the first pure-play solar company to list on the PSE (Philippine Stock Exchange),” Abacus Capital and Investment Corp. said.

The company’s IPO was already sized at the maximum of its indicative range of up to 2.7 billion shares priced at P1 apiece. At the said price, the company’s market capitalization will reach P8.12 billion.

“We’re grateful for the public’s faith in our ability to turn this power point into a power plant, and hope our work can live up to these expectations,” Solar Philippines Chairman Leandro Leviste said.

SPNEC is the PSE’s 10th and possibly final listing for the year. It is the first company to list under the Supplemental Listing and Disclosure Rules for Renewable Energy (RE) Companies approved by PSE in 2011 which provides exemption from the PSE’s track record and operating history requirements.

To date, SPNEC is at the pre-operating stage and has not commenced commercial operations.

Proceeds from the IPO will be used to complete the first 50 megawatt of the project and acquire land to expand the project beyond 500 MW, in support of SPNEC’s ambition to develop the largest solar project in Southeast Asia.

Solar Philippines incorporated SPNEC in 2016 and secured a Department of Energy’s service contract to develop the Nueva Ecija project in 2017, with construction planned to start by the end of 2021. Once operational, the project is intended to supplement the Luzon grid’s thin reserves and help prevent rotating outages that affected millions of Filipinos earlier this year.

Prime Infrastructure Holdings Inc., a company owned by billionaire Enrique K. Razon Jr., earlier announced its P3.5-billion investment for a 50 percent stake in three solar projects with a total of 340 MW that will be developed by Solar Philippines. These solar projects are located in the provinces of Tarlac, Batangas, and Cavite.

Solar Philippines has indicated that its strategy is now focused on helping the country’s power companies enter the solar market, by making available project sites it has developed over the years.

“We want to help the country’s power companies replace their future coal and gas developments with solar, so that together, we can make solar the largest source of energy in the Philippines,” Leviste said.