Contemplated Issuance of New SPNEC Stocks Will Dilute Minority by 6.25

(Source: PICC)

The last IPO in 2021 Solar Philippines Nueva Ecija Corp. (SPNEC) has decided to increase the ownership hold of its parent company Solar Philippines Inc. (SPI) after its board approved the increase of the company’s authorized capital stock to 50 billion shares from 8 billion shares. The move increases the authorized capital stock by at least 6.25 times, diluting its other shareholders at roughly the same fold. This will also effectively reduce the effective value of its shares in the market to P0.24 based on its 52-week high price of P1.50.

The share-swap will add P4 billion in additional capital to SPNEC.

At the current public float of 29.54%, SPI owns 70.46% of SPNEC. With the planned increase of capital stock issues, SPI ownership of SPNEC is expected to increase to an approximate range of 80.0 to 83.75 percent.

With the SPNEC stock growing in value from its par of P0.10 to P1.50 at its highest on 28 December last year, its estimated ownership of 57.2 billion shares would have profited a gross of P80.1 billion. The new infusion of 4 billion is merely one-twentieth of that profit.

(Source: PSE Edge, Circulars C00120-2022 and C00119-2022)

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