MANILA -- Oriental Peninsula Resources Group, Inc. (ORE) is acquiring almost a third of a renewable energy company that is majority owned by its affiliate, as it diversifies its investment portfolio by adding power generation to its existing mining business.
Oriental Peninsula said in a disclosure Tuesday that its board has approved subscription to PHP300 million worth of common shares in Oriental Energy & Power Generation Corp. at the par value of PHP100 per share.
The shares will be taken from Oriental Energy’s increase in authorized capital stock.
Oriental Energy’s application for increase in authorized capital stock is subject to the approval of the Securities and Exchange Commission.
“The subscription will result in a 30-percent ownership in Oriental Energy,” it said.
Oriental Peninsula said its board also approved last week its entry into a corporate guaranty for Oriental Energy’s obligations under the bank loan facilities of the Development Bank of the Philippines up to an aggregate principal amount of PHP2 billion at a fixed interest rate of 6.75 percent per annum, or the applicable repriced interest rate.
The company said Oriental Energy shall utilize the amount to partially finance the project cost and related expenses pertaining to the construction of an 18-megawatt hydropower plant in Timbaban, Madalag, Aklan, which it shall own, operate and maintain.
Oriental Energy’s bank loan is for a span of 12 years but ORE’s guaranty shall be stopped upon its delivery to the bank of proof of project takeover, and proof of a Department of Energy-certified copy of the certificate of endorsement of feed-in tariff eligibility.
The Timbaban hydropower plant is scheduled to start operations before the feed-in tariff expires at the end of 2019.
Oriental Energy also has hydropower projects in Manolo Fortich, Bukidnon and Odiongan, Romblon.
Oriental Energy is a renewable energy company majority owned by Citimax Group, Inc., an affiliate of Oriental Peninsula. (PNA)
