Listed Basic Energy Corp. said Monday MAP 2000 Development Corp. will acquire at least 67 percent of the outstanding capital stock of the company for P2.8 billion.
Basic Energy said in a disclosure to the stock exchange it signed a memorandum of agreement with M2DC last month for the subscription by M2DC to 9,827,990,853 primary shares of stock to be issued out of the increase in the company's authorized capital stock from P2.5 billion to P5 billion.
The subscription would represent 67 percent of the issued and outstanding capital stock of Basic Energy after the increase in capital stock.
It said the subscription would be subject to the fulfillment of certain conditions, including the approval by the Securities and Exchange Commission.
The aggregate subscription price will amount to P2.8 billion or a subscription price of P0.285 per share.
It said the payment of the initial 25 percent would be made upon the closing date subject to fulfilment of certain conditions and the remaining 75 percent upon the SEC approval of the capital increase.
It said the subscription price of P0.285 per share, which represents a premium over the par value of P0.25 per share, is a negotiated price agreed upon by the parties, taking into account factors including the potential growth of Basic Energy and findings determined from the legal, tax and financial due diligence of BEC by M2DC.
“The transaction will result in a fresh capital infusion into the company allowing it to grow and expand its current portfolio of energy-focused projects, including interests in other renewables such as solar, wind, biomass, petroleum and other types of energy projects. With this, the company hopes to build a robust project portfolio that will bring in revenues in the short to medium terms enhancing shareholder value,” Basic Energy said.
The company has a 20-percent participation interest in the Iriga Geothermal Project which is being operated by DESCO Inc.
The work program for the drilling of two wells up to 2022 was recently approved by the Department of Energy.
Basic Energy has 15-percent equity in Vintage EPC Company and VTE International Construction Company which are registered in Thailand and which are the primary engineering, procurement and construction contractors of a 220-megawatt solar power project in Minbu, Myanmar.
Phase 2 of the project commenced while the company has an on-going application for a 50-MW wind power service contract pending with the DOE.
“The company plans to pursue the above projects and for 2021, it intends to look into other projects and investments as may be allowed under the law and its articles of incorporation,” Basic Energy said.
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.
“M2DC believes that the company is a perfect vehicle for its investment in the energy sector,” Basic Energy said.
M2D holds 55 percent of Filoil Gas and Energy Company Inc.