MGen eyes IPO or backdoor listing for renewable energy unit

March 15, 2025 | 12:00am

MANILA, Philippines — Pangilinan-led Meralco Group is exploring strategic options for its renewable power arm, eyeing either an initial public offering (IPO) or a backdoor listing via SP New Energy Corp.

SPNEC told the Philippine Stock Exchange (PSE) yesterday that its parent, Meralco PowerGen Corp., is considering a potential IPO for MGen Renewable Energy Inc. (MGreen).

A backdoor listing is also on the table, with MGen evaluating the potential infusion of assets into SPNEC, a listed company controlled by the Meralco Group.

“As part of this review, the board of MGen approved the engagement of professional advisors to assess and determine the feasibility and structure of such a transaction, including compliance with applicable regulatory requirements,” SPNEC said.

Under PSE rules, backdoor listing occurs when a listed firm, directly or indirectly, “acquires the shares or assets of an unlisted company” or vice versa.

The Meralco Group assumed control of SPNEC from Solar Philippines, founded by businessman Leandro Leviste, after acquiring a controlling stake through MGreen.

While it remains uncertain whether MGreen will pursue a direct IPO or a backdoor listing, China Bank Capital Corp. managing director Juan Paolo Colet weighed in on the potential options.

“Since MGreen’s main asset is SPNEC, it makes sense to do a backdoor listing so that there is just one listed company housing the entire renewable energy business of MGen,” Colet told The STAR when sought for insights.

The move, he said, would involve conducting a follow-on offering within a year of completing the asset infusion, potentially offering an avenue to raise fresh funds for MGreen’s projects.

“On the other hand, an IPO of MGreen seems more straightforward in terms of execution, but some investors might find it odd for MGen to have two listed renewable energy platforms,” Colet said.