|
PUBLICLY-listed Basic Petroleum Corp. has been granted
by its management the go-signal to engage in
negotiations for a joint-venture arrangement for cassava
production in Zamboanga Sibugay and Zamboanga City.
In a
disclosure to the Philippine Stock Exchange, Basic said
deal will cover about 130-hectares of land in Zamboanga
Sibugay and Zamboanga City that are presently planted
with cassava. The company will have access to more than
300,000 hectares of deforested land that can be planted
with cassava and processed as dried cassava chips for
feedstock in the production of ethanol.
The
joint venture will ensure the supply of cassava as a
feedstock for the ethanol plant of Basic Energy to be
located in Gutalac, Zamboanga del Norte which is
targeted for operation in 2011.
The
cassava production venture will provide Basic Energy
with revenue streams to be derived from the sale and/or
export raw cassava or cassava chips for other commercial
uses, locally and abroad.
In April
last year, Basic also inked a memorandum of
understanding (MOU) with ZN Biofuels Partner Inc. to
venture in the alternative fuels.
Basic
signed the deal to acquire from ZN Biofuels Partners its
shareholdings in Zambo Norte Bioenergy Corp. (ZNBC).The
transaction, according to Basic, is subject to due
diligence and the execution of the transaction document.
Basic
said that under the MOU, the consideration for the
assignment and transfer of ZNBC shares to Basic is at a
maximum of P64 million with payments amounting to P10
million in cash, of which 50 percent shall be payable
upon signing and the balance of 50 percent upon receipt
of a favorable due diligence report.
At the
closing date, Basic added that it will be expected to
issue and deliver P54-million worth of Basic shares,
consisting of more than 122-million common shares of
Basic to be issued from its existing authorized and
un-issued capital stock, which shall be valued at P0.44
a share, which is the per share price based on the
closing price in March 20.
Basic
also said that both parties have acknowledged that the
maximum consideration amount of P64 million is subject
to adjustment depending on the results of the due
diligence. It further clarified that the per share price
of P0.44 is fixed, notwithstanding any adjustment on the
maximum consideration based on the due diligence.
Basic
stressed that any adjustment on the actual valuation
shall result in the adjustment on the actual number of
Basic shares to be issued or the cash component.
Among
other conditions, Basic has set that ZNBPartners
guaranty the acquisition of ZNBC of at least 25 hectares
of suitable and contiguous land as the facility site.
ZNBPartners will also guaranty the acquisition of the
required 3,000 hectares of farmland to complete the
programmed and committed 9,000 hectares to complete the
feedstock requirements. |
