The board of directors of listed firm Basic Energy Corporation has approved the proposed acquisition of up to 60-percent stake in the Villavicencio-led Filoil Energy Company Inc.
Filoil is one of the independent players in the deregulated downstream oil sector. It previously entered into a tie-up with the Philippine subsidiary of French energy firm Total.
Basic Energy’s ownership changeover had been anticipated with the sell-down of at least 67-percent of its shareholdings to MAP 2000 Development Corporation (M2DC), a real estate company affiliated with the Villavincencio group. Thus, the proposed equity purchase of Basic Energy in Filoil Energy will considerably be a transaction between affiliates.
In a disclosure to the Philippine Stock Exchange (PSE), the listed firm emphasized that members of its board of directors “resolved to approve the proposed equity investment in Filoil Energy Co. Inc. and acquire interest therein of up to 60-percent.”
As specified, out of the company’s 10 board directors “eight voted to approve the matter, with two directors abstaining upon declaring their direct and indirect interest in Filoil Energy.”
Once that equity purchase in Filoil is firmed up and closed by the parties, Basic Energy’s business portfolio will already be expanded into the downstream oil sector – primarily in bulk trading and retail of finished petroleum products.
Currently, the energy investments being pursued by Basic Energy are in the upstream petroleum sector (primarily oil and gas exploration). The company also targets renewable energy developments.
One of the company’s targeted projects would be the 50-megawatt wind farm installation in Mabini, Batangas that has already been awarded with RE service contract by the Department of Energy.
The targeted facility will be placed under corporate vehicle Mabini Energy Corporation, which will serve as a wholly owned subsidiary of Basic Energy.
As cast on project blueprint, the RE service contract covers an area of 4,860 square meters of land, which will be the subject of resource assessment of the company on the actual wind energy potential of the targeted site.
The firm’s RE service contract sets a five-year non-extendible pre-development stage. If the resource will be established to be commercially viable, the development stage will be for 25 years.