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InsiderPH [link] reported on the news that Meralco [MER 505.00, down 0.9%; 76% avgVol] subsidiary, MGen Renewable Energy (MGEN), plans to inject assets into SP New Energy [SPNEC 1.25, up 8.7%; 762% avgVol] in a move that would amount to a backdoor listing of MGEN. As George Ching of COL Financial noted in the InsiderPH article, “When Terra Solar was launched with new investor Actis last year, it was already announced that SPNEC would be the vehicle for MER Group’s future solar projects.” SPNEC is a subsidiary of MGen. No details were given on the potential size of the assets to be injected, whether they would be only solar projects or also include other renewables, or about the potential timeline for the injection.
MB bottom-line: On the one hand, I’d like the ability to invest in MER’s renewable energy projects directly through an MGEN spin-off, but on the other hand, I would also appreciate the chance to focus my exposure to the “moonshot” that is the Terra Solar project under the SPNEC banner. Given that SPNEC is already a loose collection of legacy Solar Philippines projects and The One Megaproject To Rule Them All, it’s not such a huge loss to see all of MER’s renewables stitched together in one spot. SPNEC’s stock was up over 10% during the day (it closed up over 8%) on the news, but I’m curious to see if this will sustain a further push up or if the vague details will cause some to take profits and wait for better info.
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