By Zinnia B. Dela Peña (The Philippine Star) Updated October 15, 2012 12:00 AM
MANILA, Philippines - The P800 million initial public offering of Coal Asia Holdings, owner of the country’s second biggest coal reserves, has attracted more than three times the shares available for investors, igniting new optimism in its maiden share sales.
“It’s three times oversubscribed. There’s strong demand from both institutional and retail investors,” said Paulino Soo, chairman and president of Abacus Capital & Investment Corp., which is Coal Asia’s sole underwriter for the offering.
The IPO, comprising 800 million shares, kicked off on Oct.9 and will run until today (Oct.15) with the shares scheduled for listing on Oct.23. The shares were priced at their par value P1 each.
The offering comes at an auspicious time for the Philippine economy, which is enjoying strong growth rates. Investments are on the rise and investors are increasingly bullish on the Aquino administration’s ability to deliver on its commitment to pump-prime the economy and fast-track infrastructure projects.
Coal Asia is the parent company of Titan Mining and Energy Corporation (TMEC) which owns mining exploration and development rights in some 13,000 hectares in Davao and Zamboanga-Sibugay.
Net proceeds from the offering, amounting to P726.87 million, will be used to bring the Davao Oriental mine into production by 2014 and the Zamboanga Sibugay mine by 2015.
“The company has good potential and its shareholders reputable. So the challenge now is to take the mines into production in two years,” Soo said.
Coal Asia needs $80 million over the next three to four years for the development of the two mines with potential coal resources of 120 million metric tons.
The company is looking to produce an initial 600,000 MT annually beginning 2014. It expects to post P500 million in profit in the first year of operations of the mine.
Last year, Coal Asia reported a net income of P4.91 million, more than double the P2.03 million reported in 2010 on the back of a 63 percent jump in sales to P21.84 million.
To ensure growth, Coal Asia is in talks with the country’s major players in the power industry such as Aboitiz Power, Manila Electric Co., Team Energy, DMCI Holdings, San Miguel, Ayala Corp., and the Alcantara Group for potential coal supply of their power plants.
In the cement sector, Coal Asia held negotiations with Holcim, Cemex and Lafarge.
The company is also looking to export to India, Japan, Taiwan, Hong Kong and Vietnam.
Coal Asia, through affiliate Collosal Petroleum, is acquiring a stake in VenturOil Philippines, part-owner of the Cadlao oil redevelopment project in the northwest Palawan basin.
The Cadlao prospect has probable reserves of 6.05 million barrels of oil and could produce over 11,400 barrels of oil per day with gross cash flows of over $315 million by 2013. It was developed in 1981 and produced about 11 million barrels of light oil from two wells prior to its closure in 1991 owing to high operating costs and low oil prices. source
“It’s three times oversubscribed. There’s strong demand from both institutional and retail investors,” said Paulino Soo, chairman and president of Abacus Capital & Investment Corp., which is Coal Asia’s sole underwriter for the offering.
The IPO, comprising 800 million shares, kicked off on Oct.9 and will run until today (Oct.15) with the shares scheduled for listing on Oct.23. The shares were priced at their par value P1 each.
The offering comes at an auspicious time for the Philippine economy, which is enjoying strong growth rates. Investments are on the rise and investors are increasingly bullish on the Aquino administration’s ability to deliver on its commitment to pump-prime the economy and fast-track infrastructure projects.
Coal Asia is the parent company of Titan Mining and Energy Corporation (TMEC) which owns mining exploration and development rights in some 13,000 hectares in Davao and Zamboanga-Sibugay.
Net proceeds from the offering, amounting to P726.87 million, will be used to bring the Davao Oriental mine into production by 2014 and the Zamboanga Sibugay mine by 2015.
“The company has good potential and its shareholders reputable. So the challenge now is to take the mines into production in two years,” Soo said.
Coal Asia needs $80 million over the next three to four years for the development of the two mines with potential coal resources of 120 million metric tons.
The company is looking to produce an initial 600,000 MT annually beginning 2014. It expects to post P500 million in profit in the first year of operations of the mine.
Last year, Coal Asia reported a net income of P4.91 million, more than double the P2.03 million reported in 2010 on the back of a 63 percent jump in sales to P21.84 million.
To ensure growth, Coal Asia is in talks with the country’s major players in the power industry such as Aboitiz Power, Manila Electric Co., Team Energy, DMCI Holdings, San Miguel, Ayala Corp., and the Alcantara Group for potential coal supply of their power plants.
In the cement sector, Coal Asia held negotiations with Holcim, Cemex and Lafarge.
The company is also looking to export to India, Japan, Taiwan, Hong Kong and Vietnam.
Coal Asia, through affiliate Collosal Petroleum, is acquiring a stake in VenturOil Philippines, part-owner of the Cadlao oil redevelopment project in the northwest Palawan basin.
The Cadlao prospect has probable reserves of 6.05 million barrels of oil and could produce over 11,400 barrels of oil per day with gross cash flows of over $315 million by 2013. It was developed in 1981 and produced about 11 million barrels of light oil from two wells prior to its closure in 1991 owing to high operating costs and low oil prices. source
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