A Brown eyes possible buyout of Vires Energy

BUSINESS
October 7, 2019

SHARE

A BROWN Co., Inc. said on Thursday that it had signed a deal to possibly acquire control of a company proposing to develop a liquefied natural gas (LNG) floating storage and regasification terminal with a floating power plant in Batangas City.
    
In a disclosure to the stock exchange, the Cagayan de Oro City-based company said it had signed a memorandum of agreement (MoA) with Argo Group Pte. Ltd. “for the possible acquisition” of approximately 99.995% of the outstanding capital of Vires Energy Corp.
    
The listed company said the MoA entered into “is a preliminary agreement and the prospective acquisition will be concluded after the completion of the customary due diligence period of a maximum period of 180 days.”
    
A Brown said Vires, which is owned by Argo Group, is the proponent of an integrated floating LNG storage and regasification terminal and a 506-megawatt (MW) natural gas-fired power plant.
    
The facility is located in Barangay Simlong, Batangas City. Vires has already secured registration with the Board of Investments.
    
Based on data from the Department of Energy (DoE), Vires had been cleared as early as 2016 to undergo a study that will assess its power plant project’s impact on the grid, or the country’s network of interconnected power transmission lines and substations.
    
Sought to confirm a pending application for a floating storage and a regasification terminal, the DoE’s Ma. Laura L. Saguin said in a text message: “As of now, we did not receive any application from Vires.” Ms. Saguin is chief science research specialist at the DoE’s natural gas management division.
    
Aside from its real estate business, A Brown is also into oil palm nursery and seedlings distribution, palm oil milling, operation of hotels, real estate brokerage, power generation, and investment in gold mining assets.
    
In 2014, it put up Peakpower Bukidnon, Inc., which has a 15-year build-operate-maintain-and transfer agreement with the Bukidnon II Electric Cooperative, Inc. The two have a power purchase and transfer agreement for a 10.40-MW diesel/bunker-fired power plant in Manolo Fortich, Bukidnon.
    
A Brown’s disclosure comes after the DoE on Sept. 20, issued a “notice to proceed” (NTP) to US-based firm, Excelerate Energy L.P. to develop an LNG floating storage and regasification unit (FSRU) facility in Batangas province.
    
The NTP requires Excelerate to comply within six months with construction permitting requirements, including the submission of permits from various government agencies and endorsements from local government units. The company is also required to submit proof of financial closing to the DoE.
    
In March, the DoE announced the signing of an NTP for First Gen Corp., which in December last year signed a joint development agreement with Tokyo Gas Co., Ltd. to develop an LNG facility. The Lopez-led company said last month that its immediate focus is to complete a detailed study on modifications on its existing jetty in Batangas to allow bringing in an FSRU.

RELATED ARTICLES

LEAVE A REPLY



Subscribe Now!

Receive email updates from Business Week.