The board of Oriental Peninsula Resources Group Inc. has approved a subscription to P300 million worth of common shares in Oriental Energy & Power Generation Corp.
Oriental Peninsula said in a disclosure the shares, to be taken from Oriental Energy’s increase in authorized capital stock, were valued at P100 apiece,
“The subscription will result to a 30-percent ownership in Oriental Energy,” it said.
Oriental Energy is a renewable energy company majority-owned by Citimax Group Inc., an affiliate of Oriental Peninsula.
Citimax Group is majority-owned by businesswoman Caroline Tanchay, the corporation’s chairman, and president and chief executive officer. Oriental Energy will own, operate and maintain an 18-megawatt hydropower plant in Timbaban, Madalag, Aklan, Philippines. It also has hydropower projects in Manolo Fortich, Bukidnon, and Odiongan, Romblon.
The board of Oriental Peninsula also approved a guaranty agreement for Oriental Energy’s loan from the Development Bank amounting to P2 billion to partly finance the hydro project.
Oriental Peninsula’s loan carries a fixed interest rate of 6.75 percent a year, or the applicable repriced interest rate over a period of 12 years.
“The borrower shall utilize the amount to partially finance the project cost and related expenses pertaining to the construction of its 18-megawatt hydropower plant in Timbaban, Madalag, Aklan,” Oriental Peninsula said.
Oriental Energy’s guaranty will stop upon delivery by the borrower proof of project takeover and a Department of Energy-certified copy of the certificate of endorsement of feed-in tariff eligibility.
The Timbaban hydropower plant is scheduled to start operations before the feed-in-tariff expires at the end of 2019.