The Manila Electric Company or Meralco, through its renewable energy arm MGen Renewable Energy Inc. or MGreen, is investing P15.9 billion to acquire a controlling stake in the Leviste-led SP New Energy Corp., or SPNEC.

Meralco disclosed on Thursday that the transaction covers 15.7 billion common shares and 19.4 billion redeemable preferred voting shares in SPNEC.

Once completed, the deal would provide MGreen the rights for 50.5 percent voting shares in SPNEC.

The transaction, however, is still subject to certain conditions, including regulatory approvals.

Primarily, MGreen could use SPNEC to develop 3,500 megawatts or MW of solar panels and 4,000 MW-hours of battery energy storage systems in Luzon.

MGreen intends to ramp up its attributable renewable energy capacity to 1,500 MW with investments in more and larger green energy projects — including those with battery energy storage systems.

"This will be one of the largest solar projects not just in Asia, but in the world," Meralco chairperson and CEO Manuel V. Pangilinan said.

Pangilinan also noted that the venture would support the Department of Energy's goal to have about 35 percent of renewable energy in the country's energy mix by 2030.

Meanwhile, SPNEC has committed to file its application for an increase in authorized capital stock to enable Meralco's investment.

The company said that the fresh capital will bankroll the construction and expansion of its solar projects.

"We are humbled and grateful for this opportunity to build this renewable energy platform with Meralco. We look forward to bringing together Meralco's capabilities and our solar developments for the benefit of all stakeholders," SPNEC CEO Leandro Leviste said.

UBS provides financial advice
UBS acted as a financial advisor in this transaction. SyCip Salazar Hernandez and Gatmaitan and Gulapa Law acted as legal advisors to both Meralco and MGreen.

King & Spalding and Picazo Law, on the other hand, acted as legal advisors to Solar Philippines and SPNEC.