Group poised to take control of Balabac Resources

A group associated with liquor and tobacco tycoon Lucio Tan will be the controlling interest in the publicly-listed holding firm Balabac Resources & Holdings Co. Inc. as it plans to take up as much as 85 percent of the company’s expanded capital of P5 billion.

At the same time, the move would practically strengthen Balabac’s presence in the real estate business, slowly veering away from its original focus of oil and gas exploration.

In a disclosure to Philippine Stock Exchange, Balabac corporate secretary Rolando Castillo said the company’s board has approved the offer of Round Peak Realty and Development Corp. to initially subscribe to 25 percent of the increase in authorized capital from P73.8 million to P5 billion.

The offer was made by Round Peak president Victor Yu, who is also an incumbent director in Balabac. Apart from Yu, other Balabac board officials with ties to Lucio Tan include Tanduay’s Wilson Young, William Tieng, and Jaime Bautista of Philippine Airlines.

Although not heavily traded except for the semi-government Philippine National Bank, Tan’s businesses are already well represented in the stock exchange through companies such as Tanduay ‘s Holdings Allied Bank, Air Philippines, Baguio Gold Holdings and MacroAsia.

Balabac, on the other hand, was incorporated to primarily engage in oil exploration and mineral development projects but later, in 1997, diversified and changed its primary purpose to that of a holding company, making real estate development and oil exploration among its secondary purposes.

With joint venture partner Unioil, Inc., Balabac has formed the real estate Company, B.U. Properties Corp., whose initial project, the Unioil Center, was completed in September 1996 with all 20 units sold to the market. It is a first class nine-story office condominium building strategically located at the Madrigal Business Park in Ayala Alabang.

Presently, 100 percent of the company’s oil exploration related assets and service contracts were transferred to Phoenix Energy Corp., another oil exploration company wherein Balabac has 38.4- percent interest.

As a holding company, the revenue of Balabac consist only of its equity earnings in its affiliated company, B.U. Properties Corp. since both Phoenix Energy and Phoenix Gas and oil Exploration have no commercial operations as yet.