Basic Energy Corp. has approved the renewal of its P55-million credit lines with China Banking Corp., allowing it to get funding for its future projects.
The company said its board gave the go-signal to renew a P50-million clean loan line and P5-million bills purchase line with the bank.
Chinabank extended the facility because of their solid relationship with the company, Basic Energy senior vice president and general manager Anthony Cuaycong said in a phone interview with Philstar.com.
The bills purchase line is a standard practice in accounting finance that lets any entity receive funds before banks clear checks, Cuaycong said.
The debt lines were originally going to expire in October this year, but the renewal means both debt funding will be available until October 2018.
“Generally, if you’re going to evaluate investment in project, equity is more expensive than debt. So if you are trying to make efficient use of funds at your disposal, you’d want to have a mix [of both],” Cuaycong said.
“That line has not been used. It just allows us to use [the credit facility] should there be any reason. For example, if Basic needs equity,” he added.
Basic Energy is working on geothermal and solar-powered projects, including the East Mankayan Geothermal Prospect in Ifugao, Mabini Geothermal Service Contract in Batangas, Mt. Iriga Geothermal Project in Albay, Mt. Mariveles Geothermal Project in Bataan, and West Bulusan Geothermal Prospect in Sorsogon.