CREC raises P5 billion from sale of shares to SMIC
Citicore Renewable Energy Corp. (CREC) said it raised P5 billion after selling its shares in its real estate investment trust to conglomerate SM Investments Corp. (SMIC).
The energy company sold a total of 1.88 billion common shares, equivalent to 28.79% in Citicore Energy REIT Corp. (CREIT) at P2.6534 per share, the Saavedra-led company said in a statement on Wednesday.
The transaction was carried out with CREC’s subsidiary Citicore Solar Tarlac 1, Inc.
“We believe that the SM group’s entry and investment into CREIT and the partnership with CREC unlocks potential synergies given the energy requirements of the SM group,” CREC President and Chief Executive Officer Oliver Tan said.
CREC said it will continue to be “the single largest stakeholder” in CREIT with a 32.88% effective ownership post-transaction.
“As part of our group-wide sustainability agenda to prioritize environmental responsibility and support a low-carbon economy, we are investing in CREIT to increase SM’s footprint in the renewable energy sector,” SMIC President Frederic C. DyBuncio said.
Proceeds from the sale will contribute to the development of CREC’s ready-to-build and under construction solar power projects with a total capacity of 1,583 megawatts, the company said.
BDO Capital & Investment Corp. acted as transaction adviser for the sale.
In a separate disclosure, SMIC said it does not see “any material impact” on its financials or operations.
“This deal shows SM’s commitment to expanding in the renewable energy space. Nonetheless, it is also a bet on real estate since CREIT is the country’s largest renewable energy REIT landlord,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
He said the deal is a “win-win” for the conglomerate since it is “supporting the renewable energy sector in a way that is still within its core property business.”
CREIT is the country’s first real estate investment trust listing focused on renewable energy.
VOLUNTARY SUSPENSION
In a stock exchange disclosure prior to the announcement, CREIT said it voluntarily submitted itself to a trading suspension following the “successful crossing of shares.”
“The voluntary trading halt is requested to give the investing public sufficient time to consider or assess the impact of the execution of the block sale before transacting CREIT shares,” the company said.
The trading suspension was implemented starting at 9:30 a.m. on March 27 and will be lifted on April 1 at 9:00 a.m.
CREC is targeting to go public by the second quarter, aiming to raise as much as P12.9 billion.
It was supposed to conduct its initial public offering in March.
The company is set to offer 2.9 billion common shares at a maximum price of P3.88 apiece, including an additional 435 million outstanding common shares for overallotment. — Sheldeen Joy Talavera