M2DC buys stake in Basic Energy

By VG Cabuag December 22, 2020
https://businessmirror.com.ph/2020/12/22/m2dc-buys-stake-in-basic-energy/

MAP 2000 Development Corp. (M2DC) is acquiring a majority stake in Basic Energy Corp., the energy company led by the De Venecia Group.

In its disclosure, a memorandum of agreement was signed between the two companies in which M2DC will buy at least 67 percent of Basic Energy, subject to several conditions.

M2DC will acquire some 9.82 billion shares of Basic Energy that it will issue out of the increase in authorized capital stock to P5 billion from the previous P2.5 billion.

“[The] said capital increase was approved by the Company’s stockholders at the annual stockholders’ meeting held last October 23, 2020,” the company said in a disclosure.

The said move may trigger the Philippine Stock Exchange’s tender offer rule, which requires the buyer to purchase the rest of company.

“If any acquisition that would result in ownership of over 50 percent of the total outstanding equity securities of a public company, the acquirer shall be required to make a tender offer under this rule for all the outstanding equity securities to all remaining stockholders of the said company at a price supported by a fairness opinion provided by an independent financial advisor or equivalent third party. The acquirer in such a tender offer shall be required to accept all securities tendered,” according to the rule.

“M2DC is a Philippine registered company engaged in real estate acquisition, development, and management, and as well as in investing in real properties and acquiring shares of stocks of viable corporations to exercise rights of a shareholder,” Basic Energy said in its disclosure.

The company declined to give other details of the deal.

The company was awarded by the Department of Energy a total of five service contracts for the exploration and development of geothermal energy in Mabini, Batangas; Mariveles, Bataan; East Mankayan, Benguet; Iriga, Camarines Sur; and West Bulusan, Sorsogon. The company was also previously awarded by the DOE four hydro-power service contracts all located in Negros Occidental, but it has withdrawn from these service contracts to focus on its drilling operations in Mabini, Batangas. This service contract was, however, terminated by the DOE in June last year.

The company owns Basic Diversified Industrial Holdings Inc., an investment holding company; iBasic Inc., an information technology management company and service integrator; Basic Biofuels Corp., a biofuels developer; Basic Renewables, which is into the development of renewable energy; Basic Geothermal Energy Corp., which is into geothermal energy development; and Grandway Group Limited, a Hong Kong-based unit in charge of equity investments abroad. It also owns 72.58 percent of Southwest Resources Inc., an oil exploration company.