MANILA, Philippines - Holding firm IPVG Corp. is acquiring a foreign company affiliated with a leading refinery in China in a deal valued at P2.8 billion, signaling its entry into the refinery business.
In a disclosure to the Philippine Stock Exchange, IPVG said it would partner with a Canadian-Chinese group to carry out the refinery business.
IPVG said its board approved to amend its articles of incorporation to change the company’s primary purpose to allow it to establish “a refinery in the Philippines to refine metal ores, precious stones, oil, gas, coal and minerals intended primarily for export purposes.”
In addition, IPVG approved the issuance of 2.8 billion shares at P1 each to come from the increase in its authorized capital from P2 billion to P10 billion.
IPVG said it would disclose more details as soon as it has finalized the terms and conditions and executed the definitive agreements for this transaction.
“The refinery is expected to produce an economic value-add for the Philippine economy in so far as minerals and metals are concerned,” IPVG said.
IPVG’s share price rose 14.28 percent to P1.44 each yesterday.
Investments in the refinery business are vital to balance the supply of petroleum products. By having more refineries, the Philippines would be able to shield itself partly from extreme volatilities in prices in the world market and could set the pace of competition.
IPVG completed last year the sale of all or substantially all of its assets to IP Ventures Inc., pursuant to the restructuring plan its shareholders approved last July. IP Ventures Inc. is a new company with the exact same ownership structure as that of IPVG Corp.
The aim of the restructuring is to increase shareholder value and generate cash for the company’s shareholders. It will also allow the firm to command a higher valuation and raise funds at better terms and conditions with leading private equity firms.