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BASIC Energy Corp. said it is eyeing other means of
raising funds, including borrowing money through the sale of bonds
or IOUs, in light of the prevailing volatility in the stock market.
In a telephone interview, Jose
Reyes Jr., Basic Energy executive vice president, said the firm is
still considering a plan to sell additional shares to the public but
has yet to set a timetable for it. “It is logical for us to be
careful that’s why we have to watch the markets first. For the
meantime, we are exploring other options available to us for raising
money,” he said.
If issuing additional shares
would be impossible this year, Basic Energy is mulling over the sale
of P1.6 billion worth of bonds that may be converted into equity
within three to five years. The quasi-equity instruments would be
sold to institutional investors interested in joint venture projects
with the firm, which is eyeing investments in biofuel.
Another option open to Basic
Energy is through direct private placements in the company by
strategic investors, which may include financial institutions or
firms with a stake in energy production.
Reyes said the company has been
talking to a number of institutions interested in the matter.
“We have to keep an open mind
and work with the existing conditions so that our projects would be
on schedule,” he said.
Last December, Basic Energy
applied for the increase in its primary shares to accommodate the
planned follow-on offering to be underwritten by BDO Capital and
Investment Corp. initially scheduled this March. About P3 billion in
total proceeds had been expected from the fund raising exercise.
The company planned to sell 2.5
billion shares but raised the number after some international
investors expressed interest in buying into the firm. The additional
capital would go to the construction of two or three ethanol plants
for P800 million each.
One plant would be located within
a sugarcane plantation in Zamboanga del Norte and would have a
capacity to produce 200,000 liters of ethanol a day by next year.
Reyes said the firm would continue to develop some areas
“controlled” by Basic Energy for sugarcane plantation like in
Palawan, Davao and Bukidnon.
The rest of the proceeds of the
follow-on offering were earmarked for a proposed ethanol plant and
renewable energy projects in the pipeline.
--Likha C. Cuevas-Miel
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