PHILEX Mining Corp. said on Friday that it signed and executed an agreement in relation to its subscription for 260 million common shares of PXP Energy Corp. at P11.85 each or a total of P3.081 billion.
The subscription price represents a 20% discount to the 90-day volume weighted average price (VWAP) of Philex Mining’s shares for the period ending Oct. 22, 2018, which is payable in two tranches.
According to Philex Mining, it will fund the subscription from a combination of proceeds from PXP’s repayment of Philex Mining’s advances, and cash. Philex Mining will increase its shareholding in PXP from 19.76% to 25.91% after the issuance of the shares.
A similar deal was signed and executed between PXP and Dennis A. Uy’s Dennison Holdings Corp. The latter subscribed for 340 million common shares amounting to P4.03 billion equivalent to P11.85 per share, representing a 20% discount to the 90-day VWAP of PXP shares for the period ending Oct. 22.
The subscription consideration will also be satisfied in two tranches.
The deal gives Dennison the right to at least one seat in PXP’s board of directors and nominate the board’s vice chairman. PXP can now also acquire up to 49% of the equity, interest or participation in the construction of a planned liquefied natural gas (LNG) terminal and gas-fired power plant of Phoenix Petroleum Philippines Inc, and China National Offshore Oil Corp (CNOOC).
However, it is still subject to board approval by CNOOC.
According to PXP, the total subscription of 600 million shares with Dennison and Philex will be issued out of its unissued capital stock.
Dennison will have a total ownership interest in PXP of 14.78% after the subscription.
PXP said that it intends to use the proceeds from the private placement shares to fund its exploration activities and other oil assets within the Philippines and in Peru, and to repay advances from Philex.
Philex Mining closed at P3.53 while PXP closed at P18.10.
Philex Mining is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Metro Pacific Investments Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — Reicelene Joy N. Ignacio