Sy family invests P5 billion in Megawide affiliate

MANILA, Philippines — The Sy family is once again playing a big brother role to a company led by businessman Edgar Saavedra, this time investing in Megawide’s affiliate renewable energy real estate investment trust.

The Sy-led flagship holding firm SM Investments Corp. (SMIC) acquired a 28.79-percent stake in Citicore Energy REIT Corp. (CREIT), the largest renewable energy REIT landlord in the country, for a total of P5 billion.

The deal involved the purchase of 1.88 billion shares in CREIT from Citicore Renewable Energy Corp. (CREC) and its wholly owned subsidiary Citicore Solar Tarlac 1 Inc. at P2.6534 per share.

“We believe that the SM Group’s entry and investment into CREIT and the partnership with CREC unlocks potential synergies given the energy requirements of the SM group,” CREC president and CEO Oliver Tan said.

CREC will remain the single largest stakeholder in CREIT with a 32.88 percent effective ownership.

Proceeds from the sale will contribute to the further development of CREC’s 1,583-megawatt (MW) ready-to-build and under construction solar power projects across eight site locations nationwide.

The Sy family invested in Megawide’s initial public offering back in 2011, giving them a 20-percent stake in the construction firm, before eventually divesting five years after.

CREC, which is also chaired by Saavedra, is the sponsor firm of CREIT, which debuted in the Philippine Stock Exchange in February 2022.

As the largest renewable energy REIT landlord in the country, CREIT has approximately 7.1 million square meters of gross leasable area.

“As part of our group-wide sustainability agenda to prioritize environmental responsibility and support a low carbon economy, we are investing in CREIT to increase SM’s footprint in the renewable energy sector,” SMIC president Frederic DyBuncio said.

SMIC is also looking to scale up its investments in renewable energy.

“Are we going to invest more in renewable? The answer is yes,” DyBuncio earlier said.

“If the opportunity is there, we’ll build because we do have very aggressive sustainability targets as a group. We believe that having our own source of renewable energy will make it easier for us to achieve our own groupwide goal as far as renewable power is concerned,” he said.

SMIC in 2022 acquired 100 percent ownership in Philippine Geothermal Production Co. (PGPC), which has rights to operate the Tiwi and Mak-Ban steam fields in Albay and Laguna and Batangas until 2038.

PGPC targets to reach as much as 420 MW of dependable capacity from its operated Tiwi and Mak-Ban steam fields in the next five years.

SMIC consultant for investor relations and sustainability Timothy Daniels said the group is  serious about addressing its carbon footprint.

“We’re also very serious about supporting renewable energy production in the country and moving our own energy use toward it as well,” he said.

China Bank Capital Corp. managing director Juan Paolo Colet said the deal shows SM’s commitment to expanding in the renewable energy space.

“Nonetheless, it is also a bet on real estate since CREIT is the country’s largest renewable energy REIT landlord. So this is a win-win for SM since it is supporting the renewable energy sector in a way that is still within its core property business,” Colet said.