Citicore Power Inc., a sister company of listed Megawide Construction Corp., is embarking on a real estate investment trust (REIT) offering, touted as the country’s first energy REIT.
With a share price of up to P3.15 per share, Citicore Energy REIT Corp. will offer 1,047,272,000 common shares as its primary offer; a secondary offer of up to 1,741,660,000 common shares and an over-allotment option of up to 418,339,000 common shares.
In all, it aims to raise up to P10.10 billion in proceeds, including the over-allotment option, Citicore Power CEO Oliver Tan told Property Report PH in a recent interview.
The company, which hopes to list by end-November, is embarking on a REIT listing as part of its bold plan to add 1,500 megawatts to its solar power capacity on top of its existing total capacity of 168 MW from eight power plants all over the country.
“We will build 1,500 megawatts of new solar capacity in the next five years,” Tan said.
The company has tapped Unicapital as issue manager, joint global coordinator, joint bookrunner and lead underwriter; BDO Capital as joint global coordinator, joint bookrunner and lead local underwriter; and CIMB, PNB, CLSA and ICCP as international bookrunners.
Tan said a REIT listing would enable the company to maximize the value of the real estate assets of its solar plants.
The real estate assets–some of which are company-owned and others on a long-term lease–have strong financial viability as the solar plants have guaranteed income because of existing contracts with off-takers.
At present, off-takers are the government and private sector including corporate giants.
Citicore Power, the biggest operating local solar company in the country, has a well balanced portfolio of renewable energy businesses.
These include eight operating solar power plants plus two more under construction, three biomass plantations, one run-of-river hydropower plant and one water distribution concession.
Its solar power plants are the 6.2 MW plant in Cotabato; the 7.5 MW plant in Tarlac; the 8.8 MW plant, also in Tarlac; the 18 MW plant in Bataan; the 22.3 MW plant in Clark; the 25 MW plant in Negros Occidental; and the 60 MW plant in Cebu.
A REIT, as defined by the Securities and Exchange Commission (SEC), is a stock corporation established principally for the purpose of owning income-generating real estate assets. It provides returns for investors derived from rental income of the underlying real estate asset.
Companies that own and operate income-generating real estate assets are considered REIT companies.
These companies include offices, apartment buildings, hotels, warehouses, shopping centers, highways, etc.
Citicore’s REIT listing, being the first energy REIT, would result in the diversification of REIT players in the country.