By: Euan Paulo C. AÃ±onuevo, InterAksyon.com November 22, 2013 2:11 PM
MANILA - Philex Mining Corp, which only last month borrowed more money from its Hong Kong-based parent company, will in turn increase a loan earlier granted to a United Kingdom-listed unit.
In a disclosure to the Philippine Stock Exchange, Philex said it is increasing a $15 million loan granted to Forum Energy Plc in 2010 to $18 million. Philex likewise extended the repayment date to November 24, 2016.
"This increase in the facility and the extension of its repayment date will continue to assist in funding Forum [Energy's] working capital requirements," Philex said.
Philex Petroleum Corp, where Philex has a 64.79 percent stake, holds 60.49 percent interest in Forum Energy.
Its Philippine subsidiary, Forum Philippines Holdings Ltd, will use the proceeds of the loan for a number of oil and gas exploration and development contracts in the country.
These include the Sampaguita field in the Recto Bank in offshore Palawan. Development of the Sampaguita field has been delayed because of a conflicting territorial claim by China.
The prospect is estimated to be on a par with the Philippines' largest natural gas producer, the Malampaya field, which generates roughly a third of the country's electricity supply.
The credit assistance to Forum Energy comes more than a month after Philex decided to put off a share sale and instead drew down the remaining $30 million of a $150 million credit line extended by Hong Kong-listed First Pacific Co Ltd.
Philex had tapped First Pacific's credit line last year after operations at the Philippine company's Padcal mine were suspended on account of an accidental spill of waste to nearby Agno River and Balog Creek. The Philippine government has since fined Philex at least P1 billion and has allowed the company to resume operations to complete rehabilitation of the mine.
Philex ended the first nine months of this year with a profit of P1.446 billion, or 29 percent lower than the P2.035 billion in the same period last year. The company blamed the drop on weak metal prices even though production increased following the lifting of the suspension of Padcal's operations.
InterAksyon.com is the online news portal of TV5, which like Philex is chaired by Manuel V. Pangilinan.