Roxas and Co went near-ceiling on solar farm speculation

Roxas and Company [RCI 0.88, up 49.1%] [link] saw its shares shoot up 49% in yesterday’s trading session, prompting an inquiry from the Capital Markets Integrity Corp. (the market watchdog) for an explanation. RCI responded that it has “no knowledge or information that may account for the unusual movement of its stock price”. However, there was significant speculation in several online forums on the potential use cases for the 1,619 hectares of land that the Department of Agrarian Reform recently confirmed to belong to RCI. The speculation centered around the possibility that Manny Pangilinan, through his control of Metro Pacific Investments and SP New Energy [SPNEC 1.08 unch], could leverage MPI’s connections with RCI to use its voluminous land holdings as potential sites for future solar farms under the SPNEC banner. None of the companies involved have made any statements (that I could find) in support of the speculation’s thesis, but the pump happened anyway.

MB bottom-line: I can see the logic, but reality is more complicated. On the one hand, leasing its land to a solar power developer like SPNEC or using the land as collateral for a JV with SPNEC would be a very quick way for RCI to monetize its massive landholdings. Almost anything else that it could do with the land would take more time and effort on RCI’s part. On the other hand, though, putting up a new solar farm isn’t just a matter of finding a spot on the map that’s big enough to contain the footprint of the installed solar panels. It’s not like you can just drag a shadow of the facility around the map like its SimCity, and build wherever the project might fit. Many things need to be considered. How flat is the land? How much site preparation would be needed to begin construction? Are there sufficient road networks to get labor and materials in and out? Most importantly, how far away is the nearest transmission interconnection? Listen, I’m not saying it’s a bad idea or that this is a lot of smoke with no fire, but I am saying that there’s usually a lot more to it than just “single plot of land seeks single solar developer for friendship, maybe more” for something to work out long-term. Still, I’m going to watch this one.

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