Danessa Rivera (The Philippine Star)
- March 29, 2018 - 12:00am
MANILA, Philippines — Basic Energy
Corp. (BEC) is investing nearly P180 million for its 15 percent stake in Thai
engineering, procurement and construction (EPC) contractors to bring in steady
revenue stream for the company.
In a disclosure to the Philippine
Stock Exchange, BEC said it is targeting to execute a share purchase agreement
(SPA) with Vintage EPC Co. Ltd. and and a shareholders’ agreement with VTE
International Construction Co. Ltd. within the next two months.
Under the SPA, BEC will acquire 7.5
million shares in Vintage EPC through a share purchase from parent firm Vintage
Engineering Public Co. Ltd. (VTE) of Thailand for a total consideration of 75
million Thai baht or P125.93 million.
Meanwhile, the company will purchase
3.12 million shares from the share issuance of VTE International worth 31.185
million Thai baht or P52.36 million.
The total investment amounts to
106.185 million Thai baht or P178.3 million.
BEC said the equity investments in
the two Thai EPC contractors would enhance its project portfolio as a renewable
energy and power company.
Currently, the two companies are the
primary EPC contractors for the 220-megawatt (MW) solar power plant in Minbu
District, Magway region, Myanmar.
“The investment is expected to
provide a continuing stream of revenues in the short and midterm for the
company,” BEC said.
Meanwhile, BEC’s entry into the EPC
firms will increase the working capital of these companies needed to
pursue the requirements of their respective contracts related to the solar
power plant being built.
The design and construction of the
project started in 2016 and was planned to be completed in four phases of 50 MW
for Phases 1, 2 and 3 and 70 MW for Phase 4.
Phase 1 is ongoing with a targeted
completion date of year-end 2018. The subsequent phases shall be pursued after
completion of the previous phases to achieve full completion of the four phases
on or before 2021.
In November 2017, the company signed
a term sheet with VTE, as the owner of the companies, to start the necessary
due diligence.
It has also remitted $2.622 million
(P136 million) as earnest money deposit and for the completion of the due
diligence work on the companies.
BEC has been scouting for solar
power investments here and abroad to provide revenue stream while developing
geothermal prospects, which have a long gestation periods.
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.
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