Citicore Renewable Energy [CREC 4.20, up 1.0%] [link] confirmed a news report detailing its latest expansion plans in Southeast Asia, which include the possibility of a secondary listing in Singapore. CREC said it’s exploring various growth strategies, including a potential entry into the Cambodian and Myanmar markets following a recent partnership with Indonesia’s Pertamina. The renewable energy company added that it is actively scouting for “small developers” to acquire and is currently reviewing three potential acquisition targets. However, CREC emphasized that these opportunities remain in the early stages of study and evaluation.
MB bottom-line: Couple of quick things. First, while CREC is the parent company of Citicore Renewable Energy REIT [CREIT 3.67, down 0.5%], there’s no legal requirement for any of CREC’s existing or future projects to eventually end up being injected into CREIT. It is possible (under the REIT Law) for CREIT to own foreign assets like the ones discussed above, so long as that investment doesn’t exceed 40% of the value of CREIT’s deposited property, and with “special authority from the SEC”. Last, I’m increasingly of the opinion that international expansion is a long-term requirement for any local company to reduce its political risk. The energy game here is of bedrock importance to the government and the economy, but that doesn’t mean the players in that game are insulated from the vulgarities of a system made up of conflicted political actors.
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