By Danessa Rivera (The Philippine Star) | Updated February 16, 2017 - 12:00am
MANILA, Philippines - Basic Energy Corp. will sell unissued shares to Thailand-based Vintage Engineering Public Co. Ltd. (VTE) in line with their joint development of renewable energy (RE) projects here and abroad.
In a disclosure yesterday, Basic said it has entered into a subscription agreement with VTE, a publicly-listed company in Thailand, “for a strategic partnership to pursue the exploration, development and production of renewable energy resources, in the Philippines and abroad.”
Under the deal, VTE will subscribe to aggregate 435,658,699 shares out of the unissued capital stock of the company.
Both companies initially signed a memorandum of agreement in October 2016 for a strategic partnership wherein VTE’s subscription is equivalent to nine percent of Basic Energy’s outstanding capital stock.
Issuance will be done in tranches, pursuant to and subject to the terms and conditions stipulated in the agreement, the local firm said.
Both parties still have to determine the price of the transaction, Basic Energy senior vice president and general manager Anthony Cuaycong said in a text message yesterday.
“The price is yet to be determined and will be finalized upon the signing of the subscription agreement. There will be two or three tranches,” he said.
Also under the deal, both parties agreed VTE has the right to invest in the Mabini geothermal project and other projects.
“VTE is interested in the gamut of Basic’s projects. Likewise, Basic is in discussion with VTE regarding the latter’s own projects,” Cuaycong said.
The Thai firm may also increase its interest in the company in the future, “both subject to terms and conditions which shall be mutually agreed upon by the parties in the future,” Basic said.
Originally in the business of construction and engineering, VTE has diversified its operations as an engineering, procurement and construction contractor, an operations and management operator.
It also owns a coal mine and a raw materials supply business, and aims to become a significant energy player in Asia. So far, It has lined up several energy projects in Indonesia, Japan, Myanmar and the Philippines.
Basic Energy, on the other hand, has business interests in various fields of renewable energy and alternative fuels, as well as oil and gas exploration and development.
Currently, the company has five geothermal service contracts, namely the Mabini Geothermal Service Contract (SC) in Batangas, East Mankayan Geothermal Prospect in Ifugao, Mt. Mariveles Geothermal Project in Bataan, Mt. Iriga Geothermal Project in Albay and West Bulusan Geothermal Prospect in Sorsogon.
Among its projects in the pipeline, the Batangas project is the most advanced, with the drilling of an exploratory well currently under way. Basic partnered with Trans-Asia Oil and Energy Development Corp. to develop the resource.
The company is also eyeing to develop two to three RE projects in the near term, particularly solar, for revenue stream while developing geothermal prospects, which has a long gestation period.