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.
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