Basic Petroleum buys ethanol firm
Tuesday, March 27, 2007
Basic Petroleum Corporation is embarking on its first biofuels project by acquiring integrated ethanol producer Zambo Norte BioEnergy Corporation (ZNBC) for R120 million.
In a disclosure to the Philippine Stock Exchange (PSE) yesterday, Basic corporate secretary Carlos Rosales said the firm’s board approved the acquisition of ZNBC during a special meeting last March 23.
Rosales said the acquisition is "pursuant to the new thrust of the company in supporting the search for renewable and alternative energies and other considerations related to the environment.
He said Basic will also pursue other initiatives on renewable and alternative energies, such as geothermal, wind, and solar while still continuing its mining and oil exploration projects.
ZNBC, a 100% subsidiary of ZN Biofuels Partners, Inc. (ZNBPI), is a developer, owner, operator of a planned "greenfield" and dedicated sugar cane farm in Zamboanga del Norte.
Its ethanol project consists of 9,000 hectares land and a planned fully integrated ethanol plant capable of producing 200,000 liters of ethanol per day.
Rosales said total consideration for the acquisition will be P120 million payable partly in Basic shares, priced at P0.44 per share, and part in cash. The Basic shares shall be taken from unsubscribed and unissued portion of Basic’s capital stock.
Basic will issue 248.13 million of its shares to be priced at P0.44 per share amounting to P109.18 million while the balance of P10.82 million will be payable in cash.
Of the P10.82 million, half or P5.41 million payable upon signing of the corresponding Memorandum of Understanding (MOU) and the other half payable in the manner to be agreed upon and provided in the MOU.
The firms have also agreed for due diligence to be conducted by third party consultants to be appointed by Basic to cover technical, legal and financial aspects.
The deal is also subject to the approval by the respective shareholders of the parties and approval by regulatory agencies as mandated by law.
ZNBC president Jose Reyes Jr earlier said the firm wanted to be listed in the PSE via an initial public offering or listing through the back-door to raise equity funds to partially fund the ethanol project.
Reyes disclosed that the firm has BDO Capital & Investment Corporation and Camba, Reyes & Partners, Inc. as financial advisers.
ZNBC recently signed a P1.8 billion EPC (Engineering, Procurement & Construction) Contract with Beijing-based China CAMC Engineering Co. Ltd. (CAMCE), for the construction of a brand-new integrated sugar mill and ethanol plant in Zamboanga Del Norte.
Reyes said the EPC Contract calls for the design, engineering, supply of various machinery, plant and farm equipment, and the construction of an integrated manufacturing complex.
This consists of: a sugar mill, a 6 megawatt power plant and a plant capable of producing 45 million liters of ethanol a year.(JAL)
posted by philpower @ 6:25 AM,
