PNOC-EC forms unit to manage Malampaya stake

The PNOC-Exploration Corp. (EC) has formed a new subsidiary – PNOC Malampaya Production Corp. (PNOC-MPC) – to handle the 10-percent stake of EC in the $4.5-billion Malampaya Deep Water Gas to Power project.

In a disclosure to the Philippine Stock Exchange, EC said the assignment of the 10 percent equity to PNOC-MPC was approved by the stockholders of EC last Nov. 22.

"The assignment of PNOC-EC’s 10-percent participating interest in service contract no. 38, its title, interest and obligations under other related contracts, and all or a potion of its associated-debt to its wholly-owned PNOC-MPC," EC corporate secretary Elpidio Gamboa Jr.

Some $175-million worth of debts of EC related to the Malampaya share will also be transferred to PNOC-MPC.

Gamboa said the management contract between EC and PNOC-MPC was also approved during the stockholders’s meeting.

The creation of PNOC-MPC will pave the way for the planned initial public offering (IPO) of 49 percent of the 10-percent share of EC in the Malampaya consortium within this year.

Last Nov. 19, the financial advisor for the IPO Inc Barings, presented to the PNOC board a number of options on how to carry out the proposed scheme.

Details of the presentation, however, were not immediately available for publication, according to PNOC sources.

The PNOC board is not yet decided on what to do with the proceeds of the IPO.