By Myrna M. Velasco
Davao businessman Dennis Uy is giving the group of tycoon Manuel V. Pangilinan (MVP) preference to acquire equity in the planned liquefied natural gas (LNG) project to be led by the former’s Phoenix Petroleum Philippines, Inc.
This takes the form of a swap arrangement in the equity purchase that Uy’s group had done in Pangilinan-led firm’s PXP Energy and Philex Mining Corporation.
In a disclosure to the Philippine Stock Exchange, PXP Energy indicated that it shall be given preferential rights, or any of its affiliate company “to acquire up to 49% of the equity, interest or participation of Phoenix Petroleum and/or its affiliates in the contemplated joint venture or related agreement with CNOOC (China National Offshore Oil Corporation) for the construction, development and operation of LNG terminal and gas-fired power plant in the Philippines.”
It added that this shall be subject to board approval and consent of CNOOC, which is Uy’s partner in the planned LNG venture via corporate vehicle Tanglawan Philippines LNG, Inc.
This deal follows Uy’s acquisition of shares in the Pangilinan-led firm PXP Energy Corporation that was consummated this week.
The acquisition deal had been worth over P4.0 billion for 340,000,000 common shares of PXP Energy at P11.85 per share.
Uy’s corporate vehicle in this equity buy is via his Dennison Holdings Corporation, which had gotten the approval of its board of directors on shares subscription in a meeting held this week.
The company noted that the deal entailed “20 percent discount to the 90-day volume weighted average price of the company’s shares.” The finalization of the transaction is subject to the execution of a definitive subscription agreement.
PXP Energy is service contract holder of the diplomatically saddled Recto Bank petroleum prospect in northwest Palawan basin.
This is also seen as a strategic move for Uy, having cornered CNOOC as his partner in targeted gas business – as the Chinese firm had long eyed to be part of the Recto Bank exploration and development ventures.
In addition to PXP Energy’s acquisition, Uy’s company has similarly approved the subscription to Philex Mining Corporation for 260,000,000 common shares.
On Friday (October 26), PXP Energy disclosed to the Philippine Stock Exchange (PSE) that it already signed a definitive agreement with Dennison on shares subscription that will afford the latter ownership interest of 14.78 percent in PXP Energy; while Uy’s shares in Philex Petroleum will be hiked to 25.91 percent from 19.76 percent.
On its unloading of shares, PXP Energy emphasized that it intends “to use the proceeds it expects to raise from the private placement to Dennison and Philex to fund its exploration activities and other oil assets within the Philippines and in Peru, and to repay its advances.”
PXP Energy has been experiencing string of losses in the past years as its targeted oil and gas drilling activities had not been advancing due to moratorium enforced at conflict areas within the West Philippine Sea – and that affected part of its service area, primarily that in Recto Bank.
In this year’s nine-month financial performance, PXP Energy widened its losses by 37 percent to P31.4 million from the year-ago level of P23 million – chiefly due to lagging revenues while it has likewise been incurring higher expenditure costs.