EDC acquires majority stake of Hot Rock Ltd projects in Peru and Chile
Philippine based EDC reports it has acquired the controlling stakes in four geothermal sites held by Australian developer Hot Rock Energy in Chile and Peru.
Reported from the Philippines, Energy Development Corp. (EDC) has moved to acquire controlling stakes in four geothermal sites South America, the company disclosed to the bourse yesterday.
EDC said it signed a deal with Australian firm Hot Rocks Ltd. to take over a 70% interest in areas in Peru and Chile without specifying the acquisition cost.
The areas are “in the volcanic regions of Calerias and Longavi in Chile and the Quellaaparcheta and Chocopata regions in Peru.”
“We are excited with the prospect of developing with Hot Rock what we consider as some of the best geothermal concessions in both Chile and Peru. The ability to grow our business with full control over our steam fuel supply is the strategic rationale for the Lopez group’s acquisition of the controlling stake in EDC,” EDC President and Chief Operating Officer Richard B. Tantoco said in a separate statement.
Mr. Tantoco said the firm’s 35-year experience in geothermal field operation has enabled it to vie for markets overseas.
The company earlier said it wants to pursue international projects as a means to expand its geothermal footprint.
The transaction between EDC and Hot Rocks “remains subject to the further satisfaction on certain conditions, which include fully termed documentation, confirmatory due diligence and necessary regulatory and governmental approvals.”
The agreement entails the establishment of joint-venture companies for each of the sites.
EDC said Hot Rocks had already completed most of the exploration activities in the four areas and hopes to finish all surface exploration within the next six months.
The development comes as EDC pursues plans to expland abroad, having already submitted applications for 13 sites and also bidding on five sites in Chile.
It is also looking at geothermal projects in Indonesia, Kenya and Peru, according to earlier reports.
In the meantime, EDC had posted a loss of P487.7 million in the nine-month period ending September from an income of P7.6 billion in the same period last year.
The company had to close the Bacon-Manito (BacMan) steamfields in preparation of the recommissioning of the BacMan power plants in the third quarter.
Revenues for the nine-month period ending September fell 5.7% to P18.2 billion from year-ago levels of P19.3 billion.”
Source: Business World Online