Malampaya Energy XP Pte. defended on Monday its acquisition of the shares of Shell Philippines Exploration B.V. (SPEX), saying that the Senate Energy Committee failed to see the bigger picture.
The subsidiary of Udenna Corp. (UC) said the senate panel focused on a “very thin slice of information” when it questioned its financing capacity. Malampaya Energy XP clarified that its market capitalization is just “one element of a capital structure and is not on its own a reflection of the company’s ability to fund the deals.”
“The acquisition of SPEX is 100-percent underwritten and funded via bank loans from our existing lenders. These full facility agreements have been provided to the relevant decision makers,” the company said in a statement.
Last week, Senator Sherwin Gatchalian questioned the financial capacity of the Dennis A. Uy-led company, saying figures from the Singapore Accounting and Corporate Regulatory Authority showed that Malampaya Energy XP only has a paid up capital of $100. This, he said, means that the company cannot operate a rig with the said amount.
“The acquisition is supported by international reputable financial institutions who saw Malampaya Energy’s capability to meet its obligations and to deliver value,” Malampaya Energy XP said.
It added that upon the share sale completion, the company will have “over P10 billion of cash.”
“The Energy committee has unfortunately looked at a very thin slice of information and it is Malampaya Energy’s responsibility to work with DOE [Department of Energy] and PNOC-EC to ensure all the facts are properly presented and the financing certainty and significant cash is known,” the statement read.
It added that “no drilling has been taken to arrest the depletion of the Malampaya field.”
“It has been seven years since the last drilling activity. Malampaya Energy is all out to rejuvenate Malampaya through a drilling campaign once the transaction is completed.”
The Philippines, the company said, will be short of natural gas by next year, and delaying its entry will “exacerbate the worsening electricity situation,” it said.