Manila Electric Co. affiliate SP New Energy Corp. (SPNEC) is strengthening the finances of its subsidiary Solar Philippines Tarlac Corp. (SPTC) through a P3.78-billion loan and a capital restructuring.
In a stock exchange disclosure on Monday, SPNEC said its board on 19 September approved measures tied to a term loan facility to be extended by Philippine National Bank (PNB) to SPTC, along with steps to improve the subsidiary’s balance sheet.
The company said the board authorized the “creation of a security interest over shares of SPTC owned by the Company, the Company acting as sponsor for the issuance of a Standby Letter of Credit for Debt Service Reserve Account purposes, and appointment of authorized signatories for the purpose.”
At the same meeting, SPNEC also cleared a capital restructuring and quasi-reorganization for SPTC. This includes amending SPTC’s Articles of Incorporation to cancel treasury shares and raise its authorized capital by P3.576 million to create 3.576 million preferred “A” shares.
SPNEC said the board authorized it “to subscribe for the said 894,000 preferred ‘A’ shares” that SPTC will issue at P1,000 each, through the conversion of P894 million in shareholder advances. This will allow SPTC to offset its deficit against additional paid-in capital.
The company also confirmed the appointment of SyCip Gorres Velayo & Co. as SPTC’s external auditor and the designation of new authorized signatories for the transactions.
SPNEC said the loan and restructuring are expected to give SPTC more financial flexibility to sustain operations and strengthen its capital base as SPNEC, under Meralco PowerGen Corp., pursues renewable energy growth.
The company is currently developing the 3,500-megawatt Terra Solar project across Bulacan and Nueva Ecija, which is projected to be the world’s largest solar-battery project.