March 28, 2018 | 12:03 am
BASIC ENERGY Corp. on Tuesday said
its board of directors gave the go-signal to increase the company’s equity investment
in two Thai companies to 15%.
“The equity investment will enhance
the project portfolio of [Basic Energy] as a renewable energy and power
company,” the listed firm told the stock exchange on Tuesday.
The company is increasing its
holdings of the total capital of Vintage EPC Co. Ltd. (Thailand) (VEPC), and
VTE International Construction Co. Ltd. (Thailand) (Vinter). The move was
approved by its board on March 21.
Basic Energy placed the value of its
investment at 106.185 million Thai baht or around P178 million. The amount is
broken down as 75 million baht for VEPC, and 31.185 million baht for Vinter. It
will increase their working capital and will lessen the need for advances from
stakeholders or bank financing.
“The investment is expected to
provide a continuing stream of revenues in the short and midterms,” Basic
Energy said.
The increase is a follow through of
the investment term sheet signed by the company on Nov. 9, 2017 with Vintage
Engineering Public Co. Ltd. for a possible equity investment in its two Thai
subsidiaries up to 12.5%, with an option to increase up to 20% of their total
equity.
The companies that Basic Energy
bought into are the primary engineering, procurement and construction (EPC)
contractors of the 220-megawatt (MW) solar power plant located in Minbu
District, Magway region, Myanmar.
The deal is subject to the
compliance with certain precedent conditions resulting from the due diligence
work on the investee companies and the approvals of their board of directors.
It is also subject to the mutual
agreement of the parties on the provisions of the share purchase agreement and
shareholders agreement to include directorship positions and minority rights
provisions, among others. The agreements also rest on the final board approvals
by Basic Energy and the investee companies.
The share purchase agreement is
targeted to be executed within April, while the shareholders agreement is
expected to be completed in April or May.
Basic Energy described VEPC as the
supplier of the materials and equipment for the construction of the Myanmar
solar power project, while Vinter handles the construction services required to
build and complete the power plant.
“The development of the project
commenced in 2016 and the power plant will be constructed in four phases, Phase
1 of which is targeted to be completed by end of 2018. Completion of all 4
phases of the project is targeted on or before 2021,” the company said. — Victor
V. Saulon
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