Basic Energy Corp. may acquire 10 percent of a biomass power project in Japan in a bid to expand its portfolio of renewable energy projects in the Philippines and abroad.
Basic Energy said in a disclosure to the Philippine Stock Exchange Friday it signed an agreement with Vintage Holding Japan Company Ltd. to invest in the 25-megawatt biomass power plant in Karatsu City, Saga Prefecture in Japan.
VHJ holds a 100 percent executive right to the biomass power plant project that is wholly owned and controlled by Innocent Biomass Power GK.
“The term sheet is a non-binding intention of BEC to invest in the power project for the 25-MW Biomass Power Plant of Innocent Biomass Power GK located at Karatsu City, Saga, Prefecture, Japan,” the company said.
Under the signed term sheet, Basic Energy will pay a refundable earnest money deposit to enable it to conduct due diligence on the project and secure exclusivity in the negotiations on the agreement.
Basic Energy plans to invest 10 percent of the total equity of IBP, with an option to increase up to 20 percent of total equity of said companies after satisfactory results of the due diligence work on Innocent Biomass and its project.
The company agrees to complete the due diligences work within 60 days from the signing of the term sheet.
“In the event that the due diligence work on IBP and its project yields favorable results satisfactory to BEC, the parties shall agree to finalize the terms of the equity investments of BEC in IBP and its project,” BEC said, adding the parties agreed to executive the shareholders’ agreement and close the transaction not later than June 30 next year.
The closing of transaction date may be extended for another 30 days period, upon mutual agreement of the parties.
Earlier, the board of Basic Energy approved a 12.5-percent equity investment in Vintage EPC Co. Ltd. and Vintage International Construction Co., wholly-owned by Vintage Engineering Public Co. Ltd or VTE.
VTE has bagged the contract to build a 220-megawatt solar power plant in Minbu, Myanmar.
Basic Energy also acquired a 49 percent stake in V.O. Net Biodiesel Asia Co. Ltd., wholly-owned by VTE and which currently operates a 1.2-MW solar power plant in Kalisin, Thailand.