MRC Allied Inc., a listed property developer diversifying into energy, said on Monday that it was acquiring a 15-percent stake in Sulu Electric Power and Light Philippines, Inc. (Sepalco) for $5 million or P254.66 million.
Sepalco operates a 50-megawatt plant located in a 70-hectare property in Palo, Leyte, which has a total of 188 solar panels and is connected to the existing 69-kilovolt transmission line of the National Grid Corp. of the Philippines (NGCP) in the province.
MRC said it signed a memorandum of agreement with Sepalco on Monday for the stake acquisition, which marks MRC’s first foray into the energy sector.
“We received an offer for more than 15 [percent]but now, Sepalco is one of those candidates for FIT [feed-in tariff] until it was suspended, so we thought it was an opportunity for us to actually be part of an operating plant.
But our commitment was to help them with the PSAs [power supply agreement]and bilaterals,” MRC President and Chief Executive Officer Gladys Nalda told reporters on the sidelines of the company’s special stockholders’ meeting.
The FIT system is an incentive scheme for investors in renewable energy whereby participants can sell the power they produce at a guaranteed fixed rate per kilowatt-hour which more expensive than coal-fired energy.
This is part of the government’s plan to lure more investors into clean energy.
“We have the opportunity to increase our shareholdings but for now, we have an option to get a higher stake, hopefully [a]controlling [stake], and then we will help them improve their financials,” she added.
“This will complete MRC Allied’s 200-MW target for 2017,” Nalda said.
“MRC will now be able to develop, design, construct, operate, maintain, buy, acquire, sell, import and export renewable and clean energy equipment, systems, power plants, and technologies that produce electricity from renewable and clean energy sources such as, but not limited to solar, wind, hydro, geothermal, biomass, liquefied natural gas, and other clean and renewable energy sources,” the company said.
Sepalco last year incurred a net loss of about P6 million, but MRC said it is willing to help the energy firm with the off-takes.
At the same meeting, MRC secured the approval of its shareholders to issue up to 2 billion preferred shares for future capital raising exercises, and increase the number of its Board of Directors from seven to nine.
“It will be 2 billion preferred shares but only one billion will be issued this year,” MRC Chief Finance Officer Alejandro Palacio said.