Market Event

ACEN said Monday it acquired a majority stake in Solar Philippines Central Luzon Corp. (SPCLC) from Solar Philippines Power Project Holdings Inc. that will pave the way for the development of more power projects between the two parties.

Opinion

The acquisition of SPCLC, amounting to a total of P619,000 for 99% ownership stake, is just meant to push forward its proposed joint venture with Solar Philippines to develop solar power projects in Central Luzon. Recall that ACEN was able to secure P3.3 Billion last December to develop two solar plants in Arayat and Mexico, Pampanga with a total installed capacity of 75MW each.

Currently, ACEN has a net attributable capacity of 990MW, which includes 447MW of renewables. Upon the infusion of the international assets through the share-swap with ACEIC, total renewable capacity will increase to a total of 1,402MW, 28% of ACEN’s 5- GW target by 2025.

We reiterate that the impending share-swap in third quarter 2021 (3Q21) and the eventual issuance of additional primary shares to GIC within this first quarter entails a substantial dilution of 54%. At its close of P6.79, ACEN is trading at 45x full-year 2021 P/E, far above its peer group average of 15x in the region.

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