Profiling: APC Group, Inc. (PSE: APC)

APC Group, Inc. (PSE: APC, the Company) is currently not in an operating stage. The following is APC’s corporate structure:

APC1

 

All of the above subsidiaries are in the pre-operating stage. The Company is engaged in geothermal energy exploration (through APEC & PRC-Magma), coal resource exploration, cement manufacturing, and mining.

 

Geothermal Energy Exploration

The Company has a total of three geothermal steam fields under exploration and development namely, Kalinga Apayao Geothermal Project (APEC), Mainit-Sadanga Geothermal Project (PRC-Magma), and Buguias-Tinoc Geothermal Project (PRC-Magma). Among the three, the Company’s interest in Kalinga Apayao is at the most advanced stage.

Kalinga Apayao geothermal project is under development that has a potential to generate 100 MW of new capacity and will approximately cost $300 million. In November 2010, APEC and its partner Guidance Management Corporation (GMC) signed a Farm-out Agreement with Chevron Geothermal Philippines Holdings, Inc. (Chevron) which makes Chevron responsible for the exploration, development and operation of the steam field and power activities. Also, under the agreement APEC and GMC will have the option to take equity position of up to 40% of the geothermal project.

Chevron, a foreign company, intends to convert the service contract to Financial and Technical Service Agreement (FTAA) in order to own the majority stake of the geothermal project.

Drilling of exploratory wells will start by the third quarter of 2014 which will take six months to complete. If the exploratory wells prove to be feasible, construction of the power plant will start and will be expected to operate commercially in late 2017 or early 2018.

Other geothermal projects

Mainit-Sadanga Geothermal Project has a total area of 58,911 ha. in Benguet Province and is estimated to have a potential of 60-100 MW.

Buguias-Tinoc Geothermal Project has a total area of 35,424 ha in Ifugao Province which also has a power potential of 60-100 MW.

Coal Resource Exploration

Aragorn Coal has two Coal Operating Contracts (COCs) located in Isabela (3,000 ha.) and Masbate (2,000 ha.). Masbate was dropped since extraction is not feasible and Isabela was put on hold due to anti-mining sentiment.

Cement Manufacturing

ACC was envisioned to manufacture of 1.5 million tons of cement a year. The Company has two Mineral Production Sharing Agreement (MPSA) issued in 1997 covering 1,000 ha. land containing limestone deposits in the Municipality of Ginalitan in Southern Cebu. An area of approximately 29 ha. has a proven and probable reserves of more than 50 years.

ACC is currently seeking prospective partners for the cement plant.

Mining

APC mining currently has an exploration permit in Alubijid, Misamis Oriental for a potential source of chromite and copper.

Currently, APC Mining is seeking prospective partners to further explore and develop the tenement.

 

Other business developments

On April 17, 2013, the Board of Directors of APC approved the sale of a wholly owned subsidiary, Environmental and General Services, Inc. (EGSI) to Viridi Environment, Inc. [1] for P14.5 million. [2] EGSI has a net asset of 41.6 million as of December 31, 2012 which suggests that the sale of ESGI is at a loss.

EGSI is engaged in the business of general and janitorial services and cleaning of buildings and other premises.

 

Sources:

  1. Board approval of sale of equity interest in Environmental & General Services, Inc. to Viridi Environment, Inc., http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-3161_APC.pdf
  2. Additional information re: Board approval of sale of equity interest in Environmental & General Services, Inc. to Viridi Environment, Inc., http://www.pse.com.ph/resource/disclosures/2013/pdf/dc2013-3238_APC.pdf
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2 thoughts on “Profiling: APC Group, Inc. (PSE: APC)

  1. Pingback: Stock thoughts: VMC, APC, TA | Fundamental Enthusiast

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