CREIT parent to go public

By Iris Gonzales | The Philippine Star
January 16, 2023


MANILA, Philippines — Citicore Renewable Energy Corp. (CREC), the parent company of listed Citicore Energy REIT Corp. (CREIT) is preparing for an initial public offering this year.

Edgar Saavedra, chairman of CREC, said his group is strengthening its presence in the power sector given the pressing and growing demand for renewable energy today.

Saavedra is also chairman of Megawide Construction Corp., the sister company of CREC parent firm Citicore Power Inc.

Oliver Tan, president and CEO of CREC, said the company plans to go public either in the second or third quarter of the year.

Tan did not disclose the size of the IPO, but said it would be a “blockbuster” offering.

Proceeds will be used to ramp up capital investments in the renewable energy space to help boost the country’s green energy supply and support the Marcos administration’s energy-sufficiency agenda.??

Tan said CREC would embark on its aggressive growth program starting next year.??

“CREC is planning to break ground on at least three solar plant projects, with an aggregate? capacity of 570 megawatts in 2023 – 270 megawatts in the first half and another 300 megawatts in the second semester,” he said.

Under its five-year plan, the company aims to have a portfolio of roughly 5,000 megawatts to help address the need to replace coal-fired power supply in the country in sync with the times where banks are no longer funding coal projects.

For its part, CREIT is looking to acquire land that will increase its portfolio to more than 700 hectares from almost 200 hectares, cementing the company’s position as the largest landlord of solar farms in the country.?

“CREIT is eyeing approximately 500 hectares of land across the Philippines that will be leased out to solar power operator tenants. ” Tan said earlier.

CREC’s planned IPO this year follows CREIT’s P6.4-billion REIT offering iin 2022.

CREIT, as the country’s first renewable energy REIT, posted a net income of P906.5 million in from January to September 2022, almost eight times more than the amount it generated in the same period last year.

Revenues likewise grew almost five-fold to P996.8 million, with the shift in revenue source from electricity sales to the more stable and resilient land lease, coming from CREIT’s rich land portfolio of almost 200 hectares.

“The REIT business model of leasing assets proves to be very efficient, with operating and net income margins higher at 92 percent and 91 percent respectively as of September 2022 versus 64 percent and 62 percent in the previous year. This enables us also to generate higher income and share a bigger portion of our distributable income with our shareholders, compared with other investment alternatives,” Tan said.