By Victor V. Saulon, Sub-editor
BASIC Energy Corp. has signed an investment term sheet with a Japanese company for the possible acquisition of at least a 10% stake in a 25-megawatt (MW) biomass power plant in Japan, the company told the stock exchange on Friday.
Vintage Holding Japan Co. Ltd. (VHJ), the Japanese firm, holds full executive rights over the facility in Karatsu City, Saga Prefecture, Japan that is wholly owned and controlled by Innocent Biomass Power GK (IBP).
Basic Energy said the term sheet grants it the exclusive right “to negotiate and finalize the terms of the investment with VHJ. A refundable deposit will be made to begin the due diligence process on IBP and the project.”
The term sheet was approved by Basic Energy’s board of directors during a meeting on Oct. 26, 2017.
“Under provisions of the term sheet, Basic Energy will strive to complete the DD (due diligence) process in 60 days, but may ask for an extension subject to IBP’s consent,” Basic Energy said.
“Upon favorable results of the DD process on IBP and the project, the covering shareholders agreement will then be signed on or before June 30, 2018, during which time Basic Energy can opt to increase its planned investment to up to 20%,” it added.
Basic Energy’s possible participation in the biomass project is in line with its thrust to expand its renewable energy portfolio in the Philippines and abroad.
The signing follows a similar development last month when Basic Energy signed a term sheet with a Thai firm for the possible acquisition of at least a 12.5% stake in two companies that had been awarded the engineering, procurement and construction (EPC) contract of a solar farm in Myanmar.
The company signed the investment term sheet with Vintage Engineering Public Co. Ltd. (VTE) of Thailand, which owns Vintage EPC (VEPC) and Vintage International Construction Co. Ltd. (Vinter).
The document covers the non-binding intention of the company to invest in VEPC, its successor or designated assignee, and Vinter.
On Friday, shares in Basic Energy rose 1.36% to 22.3 centavos each.
