Basic Petroleum buys biofuels maker

Listed Basic Petroleum Corp. will acquire the entire biofuels maker Zambo Norte Bionergy Corp. (ZNBC), after its board approved the memorandum of understanding for the transaction. In a statement posted on the Philippine Stock Exchange website the late Wednesday, Basic said it will pay P64 million for the 100 percent shareholdings of ZN Biofuels Partners Inc.. "The parties acknowledged that the maximum consideration amount of P64 million is subject to adjustment depending on the results achieved by the due diligence conducted by Basic," the statement said. Of the amount, P10 million be cash, of which P5 million will be paid upon signing of the MOU and the balance upon receipt of a favorable due diligence report. At closing date, Basic will issue and deliver P54 million worth of shares including 122,727, 272 common shares at P0.44 each. Basic Petroleum is mainly involved in exploring, developing and exploiting oil and minerals while ZNBC produces ethanol. ZNBP also guaranteed the acquisition by ZNBC of at least 25 hecatres of suitable and contiguous land as the facility site based on representatioin of a maximum of P50 million. The former also bought 3,000 hectares of farmland required for the programmed 9,000 hectares to complete feedstock requirements of the facility. These acquisitions would amount to a maximum of P6 million. "Basic commits to fund ZNBC and/or ZNBC's subsidiary for acquisitions, and such other working capital and operating fund requirements for the facility," the statement. -Cheryl Arcibal, GMANews.TV