Philex Mining Corp. paid its 25-percent downpayment, or P770.25 million, under a subscription agreement involving 260 million common shares of PXP Energy Corp. at P11.85 per share for a total consideration of P3.081 billion.
PXP Energy disclosed to the Philippine Stock Exchange it also amended the terms of subscription by Dennison Holdings Corp. controlled by businessman Dennis Uy.
Dennison agreed on October 26 to subscribe to 340 million common shares in PXP Energy at an aggregate subscription price of P4.03 billion.
“On December 26, 2018, the parties agreed to reschedule and accelerate the full payment of the subscription price, net of downpayment, to not later than March 31, 2019,” PXP Energy said.
Dennison will pay a downpayment equivalent to one percent of the total subscription price on or before January 7, 2019. In the event Dennison fails to pay the entire subscription price on or before March 31, 2019, the full amount of the downpayment will be forfeited in favor of PXP and the subscription agreement will be terminated at the option of PXP Energy.
Following the subscription to the shares and full payment of the subscription price, Dennison will be entitled to at least one seat in the board and nominate the vice chairman of the board… ,” PXP Energy said.
The total subscription of both Dennison and Philex in PXP Energy reached P7.11 billion, which the oil and gas firm plans to use to fund exploration projects.
“PXP 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 from Philex,” the company said earlier.
Philex owns 19.76 percent of PXP prior to the new subscription. The other shareholders are Asia Link B.V., 16.73 percent; Social Security System, 13.73 percent; First Pacific Co. Ltd. Group, 8.23 percent; Two Rivers Pacific Holding Corp.; and the public, 33.83 percent.
Dennison, a company beneficially owned and controlled by Uy, signed a non-binding term sheet with the company. This is the first oil and gas exploration investment of Uy.
After the subscription of Dennison and Philex, Dennison will have a total ownership interest in PXP of 14.78 percent, while Philex will increase its shareholding in PXP to 25.91 percent.