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Citicore Renewable Energy Corp. (CREC) is embarking on a P70-billion capital expenditure plan to boost its renewable energy capacity to 1,500 megawatts (MW) in the next five years.
At a media briefing on Tuesday, CREC president and CEO Oliver Tan said that the 1,500-MW target capacity will be funded “through IPO (initial public offering) proceeds of CREIT.”
Citicore Energy REIT Corp. (CREIT), the country’s first energy-focused REIT or real estate investment trust, debuted on the Philippine Stock Exchange on Tuesday and raised P6.4 billion through an IPO.
“We can also borrow from local banks to bankroll our construction,” Tan said.
To date, CREC generates an installed capacity of 163 MW.
As to the CREIT listing, the company’s shares ended its first trading day at P2.84 apiece, 11.37% higher than its offer price of P2.55 per share.
Tan said overwhelming support from investors demonstrated confidence and increased appreciation for REITs as a new asset class.
Post-offer, CREIT plans to implement a dividend payout of at least 95% of its distributable income for the preceding year, subject to availability of unrestricted retained earnings and compliance with applicable laws, which is a premium over the required dividend payout of at least 90%.
CREIT plans to use the net proceeds from the primary offer to acquire properties within the Citicore Group, particularly the properties owned by Citicore Solar Bulacan Inc. in Bulacan and Philippines Solar Energy One Inc. in South Cotabato.
In a recorded message during CREIT’s listing ceremony, Finance Secretary Carlos Dominguez III said more energy companies should access the capital market to fund green investments that will complement ongoing government efforts to fight climate change.
“CREIT listing is a perfect example of how the government and our private sector can jointly build energy sufficiency and address issues related to global warming… It also expands the REIT horizon, going beyond commercial property holdings,” Dominguez said.
The Finance chief said that REITs have been flourishing in the country, with five firms already established in the market with a total capitalization of P280.6 billion.
With Citicore as the sixth REIT, Dominguez said the total market capitalization of this “powerful financial instrument” is expected to reach nearly P300 billion or 1.4% of the country’s gross domestic product (GDP). — VBL, GMA News
Citicore sets P70-B capital spending plan for next five years
Source: News Panda Philippines
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