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Abacore to acquire Simlong Energy for P900 million

Danessa Rivera (The Philippine Star) - May 11, 2021 - 12:00am

MANILA, Philippines — Listed firm Abacore Capital Holdings Inc. is acquiring 90 percent of Simlong Energy Development Corp. (SEDCO), which is building an energy industrial park in Batangas, for P900 million.

In a disclosure to the Philippine Stock Exchange yesterday, Abacore said its board approved the acquisition of SEDCO by subscribing to 900 million shares from the latter’s planned authorized capital stock hike, which is subject to the approval of Securities Exchange and Commission. The subscription agreement was signed on May 6.

Incorporated on Nov. 15, 2013, SEDCO’s primary purpose is to carry on the business of constructing, establishing, operating, and setting up of power plants, terminals for natural gas, pipelines for distribution of energy products, generating, buying, selling, brokering, storing, transmitting, distributing energy derived from viable sources of power, including but not limited to coal, fossil fuel, geothermal, nuclear, natural gas, hydroelectric and wind, for lighting and power purposes, to any person or entity, commercial and/or industrial centers/parks, economic zones and the general public.

Once approved by SEC and other necessary regulatory bodies, Abacore will pay an initial P250 million to SEDCO.

By acquiring SEDCO, Abacore hopes to take the lead in developing the Simlong Energy Industrial Park project in Batangas.

In 2019, SEDCO inked memoranda of understanding (MOUs) with China Petroleum Pipeline Engineering Co. Ltd. (CPPEC) for the industrial park development, and with China Harbour Engineering Ltd. Co. (CHELC). Both projects are part of China’s One Belt One Road initiative.

CPPEC is a subsidiary of the China National Petroleum Corp. and the primary builder of pipelines in China.

Meanwhile, CHELC is an engineering contractor and a subsidiary of China Communications Construction Co. CCC), providing infrastructure construction, such as marine engineering, dredging and reclamation, road and bridge, railways, airports and plant construction.

The MOU with CPPEC is to cooperate for the Energy Park with respect to, but not limited to engineering, design, procurement, construction, financing, and trading. On the other hand. the MOU with CHELC invites the Chinese firm to invest in the energy park.

With the takeover of SEDCO, Abacore said it would take the lead in the project which will result in huge recurring revenues.

The Simlong Energy Industrial Park Project would be renamed Abacore Energy Hub, an industrial location for energy related projects like power plants, liquid natural gasification projects.

“The Abacore Energy Hub will be a one stop shop for energy projects which is in line with Batangas’ reputation of being the most ‘powerful’ as it contains and produces most of the energy needs of the entire Luzon,” Abacore said.

Abacore said SEDCO would be the corporate vehicle where its affiliates will consolidate land assets that will be part of the Abacore Energy Hub.

“The details of the consolidation are being worked on in the most tax efficient manner, which will be disclosed to the public in due time in accordance with the disclosure rules of the exchange,” Abacore said.

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