Monday, June 4, 2018

Basic Energy board approves preferred shares creation to raise funds


June 1, 2018 | 8:02 pm

THE BOARD of directors of Basic Energy Corp. has approved the creation of preferred shares out of its authorized capital stock to allow the company to raise funds to support its projects in the years leading to 2028.
Basic Energy told the stock exchange on Friday that the move, which requires amending its articles of incorporation, was approved by the board last May 31.
The company said its target projects within the 10-year period spanning 2018-2028 “are expected to generate steady streams of revenues” and the proposed amendment “shall provide an option to raise funds for these projects, the undertaking of which shall be more feasible.”
“With more projects, operations is expected to [be] more robust and vibrant,” the listed energy and exploration said.
The amendment of the company’s incorporation papers calls for dividing its authorized capital stocks to seven billion common shares and three billion preferred shares.
The proposal will not entail an increase in its capitalization, which will remain at P2.5 billion.
Basic Energy said it has identified target projects that will require it to raise funds.
Several funding options had been cited such as, but not limited to, borrowings, corporate notes or bonds, additional issuance of common shares and issuance of preferred shares.
The company said the last option requires amending its incorporation papers as the present authorized capital stock under the existing provision consists only of common shares.
Aside from the creation of preferred shares, the proposed amendment will include the authority of the board of directors to determine the features, terms and conditions of each series of preferred shares. There will be no preemptive rights on the issuance of common and preferred shares, bonds and other instruments.
The proposal is subject to the approval of the stockholders during the company’s annual stockholders meeting on June 27.
Basic Energy previously announced it is pursuing renewable energy projects in the Philippines and in Thailand with Thai firm Vintage Engineering Public Co., Ltd. It also disclosed the possible acquisition of at least a 10% stake in a 25-megawatt (MW) biomass power plant in Japan.
The company has land bank in parts of the Philippines, including a 178,634 square-meter (sq.m.) property in San Fabian, and 415,895 sq.m. in Bolinao, both in Pangasinan. It is considering solar projects in these properties.
On Friday, shares in the company were trading higher by 0.45% to P0.225 each. — Victor V. Saulon

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