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By Katrina Mennen A. Valdez, Reporter
THE Philippine unit of Hong Kong listed First
Pacific Co. Ltd. has decided to shelve its planned venture into
biofuels.
In a disclosure to the Philippine Stock
Exchange, Metro Pacific Investments Corp. (MPIC) said it has
canceled its partnership with Basic Energy Corp. (BEC) and Basic
Biofuels Corp (BBC) for a multi-billion-peso construction of two
integrated multiple feedstock ethanol plants in Mindanao.
MPIC said that it would discontinue the
consideration of a possible investment or participation in the
bio-fuels project of BEC and BBC after evaluating the same.
“Thus, in accordance with Section X of the MOU
[Memorandum of Understanding], MPIC has served a formal notice
terminating the said MOU,” the company stated.
MPIC earlier signed a memorandum of
understanding with BEC and BBC “to assess the viability of
establishing a joint venture company” that would engage in the
production of ethanol and other alternative fuels.
BEC earlier said that the processing plants are
capable of producing around 80 million liters of ethanol per year.
Jose Reyes, BEC executive vice-president and
treasurer, had said that the company and MPIC were supposed to shell
out at least P3 billion for the construction of the ethanol plants.
MPIC’s technical, legal and financial
consultants had conducted a 45-day due diligence on the said
projects in Zamboanga del Norte and South Bukidnon.
“If the due diligence results are positive,
the parties will then pursue a basic framework for collaboration,
cooperation and coordination in the establishment of the joint
venture,” MPIC had said.
Reyes said P4 billion of the P6 billion required
would have been raised through borrowings, and the remainder through
an offering of additional shares and a private placement.
“Basic’s enlarged capital structure is
expected to facilitate the entry of strategic investors, certain
foreign investors and a planned follow-on offering, hopefully,
before the year ends,” the BEC official had said.
Apart from its biofuels foray, BEC is also
venturing into other energy sectors. It earlier signed a geothermal
service contract with the Department of Energy for an exploration
and development project covering the Calumpan Peninsula in Mabini,
Batangas. The company said it would undertake exploratory activities
and well drilling to determine the viability of a geothermal
resource in the area for power generation.
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