APC shares surge on rumors of near-deal with Chevron unit

MANILA, Philippines - Shares of APC Group Inc. have been on a strong upward trend since the second week of February on rumors the company is close to signing a deal with a subsidiary of American multinational energy firm Chevron Corp.

From only 30 centavos on Feb. 11, APC shares have more than doubled in value to close at 62 centavos yesterday.

Rumors have it that APC is in talks with Chevron Geothermal Philippines Holdings Inc. for a possible joint venture on a 200-megawatt project in Kalinga-Apayao, a province north of Manila.

Chevron, one of the world’s six supermajor oil companies, is in every aspect of the oil, gas and geothermal energy industries, including exploration and production, refining, marketing and transport, chemicals manufacturing and sales and power generation.

APC chairman Willy Ocier neither confirmed nor denied whether it was Chevron they were talking to, pointing out that the company is bound by confidentiality obligations.

APC officials earlier said they expected to sign an agreement with a still-unidentified foreign partner by end-March. The foreign geothermal plant partner will conduct exploration and development of the project.

The company is undertaking a quasi-reorganization to clean up its balance sheet and significantly pare down P7.7 billion in capital deficit. The program involves the reduction of the par value of the company’s shares to halve a deficit in retained earnings.

The new par value of APC shares and the exact amount of the resulting reduction in deficit will be decided after further study and consideration.

The deficit was a result of losses incurred in previous years. In the nine months ending September 2009, however, APC has swung back to profitability with a net income of P32.86 million from a net loss of P11.44 million.

The financial turnaround was attributed to the increase in value of APC’s investment in stocks (P29.8 million) and other income (P1 million), as well as lower expenses.

Among APC’s subsidiaries include Environment and General Services Inc., a company engaged in cleaning and manpower outsourcing services; Aragorn Power and Energy Corp.; Aragorn Coal Resources Inc.; and APC Mining Corp.