Meralco Eyes IPO or Backdoor Listing of RE Unit to Boost Growth
- March 19, 2025
Meralco PowerGen Corp. (MGen), a subsidiary of the Manila Electric Company (Meralco), is considering either an initial public offering (IPO) of its renewable energy arm, MGreen, or its potential backdoor listing through SP New Energy Corporation (SPNEC). This move is expected to strengthen MGen’s position in the renewable energy market and accelerate its growth in the sector.
A backdoor listing is a strategy in which a private company gains public listing status by acquiring or merging with an existing publicly listed company. This is an alternative to undergoing a formal initial public offering (IPO).
“Meralco Powergen Corporation (MGEN) is currently evaluating the potential initial public offering (IPO) of MGEN Renewable Energy, Inc. (MGreen) which may include the possibility of injecting assets to SPNEC,” the company said in a recent disclosure to the Philippine Stock Exchange (PSE).
“As part of this review, the MGEN Board has approved the engagement of professional advisors to assist in assessing the feasibility and structure of such a transaction including compliance with applicable regulatory requirements,” it added.
A logical move to unlock new capital
SPNEC, which is majority-owned by MGreen, primarily focuses on developing and operating integrated solar power projects. Its MTerra Solar project in Nueva Ecija, Central Luzon, is poised to be the world’s largest integrated renewables and energy storage project. It will combine a 3,500-megawatt (MW) solar farm with a 4,500-MW battery energy storage system (BESS) facility in Nueva Ecija, Central Luzon.
“Since MGreen’s main asset is SPNEC, it makes sense to do a backdoor listing so that there is just one listed company housing the entire renewable energy business of MGen,” Juan Paolo Colet, managing director of China Bank Capital Corporation, told The Philippine STAR.
“On the other hand, an IPO of MGreen seems more straightforward in terms of execution, but some investors might find it odd for MGen to have two listed renewable energy platforms,” Colet added.
The potential listing could also open up opportunities for new investors interested in sustainable investments. With the global push for cleaner energy, renewable energy stocks have seen a surge in interest, making this a promising time for many RE players to pursue a public offering.
Sources:
https://edge.pse.com.ph/openDiscViewer.do?edge_no=93a643a675e12ffeec6e1601ccee8f59
https://edge.pse.com.ph/openDiscViewer.do?edge_no=48618cd9c428ce2fec6e1601ccee8f59
