Meralco’s SPNEC purchase actually a convertible loan
Meralco [MER 406.00, up 0.8%; 54% avgVol] [link] clarified reporting yesterday that it had purchased an additional 11.6% stake in SP New Energy [SPNEC 1.30, up 0.8%; 277% avgVol] from Leandro Leviste’s Solar Philippines (SPPPH) for P7.5 billion. In its note, MER said that it actually “extended a one year loan of P6.7 Billion exchangeable into 5.8 Billion SPNEC shares at maturity”. Later on, SPNEC was asked to clarify some points of the deal by the exchange, which it did in a reply that revealed: (1) the maturity date of the loan is September 2, 2025; (2) SPPPH will pay interest of 12% per year, with the ~5.8 billion SPNEC shares pledged as a security interest on the loan; (3) the ~5.8 billion shares are secondary shares (from SPPPH); and (4) there is an additional P0.8 billion tranche of the loan that is “subject to certain conditions.”