By Ray Enano
Posted on 11 Oct 2012 at 12:01am
Coal Asia Holdings Inc., owner of the second- largest coal reserves in the Philippines, is attempting to follow the footsteps of listed power-related companies that made recent impressive runups in the stock market.
Coal Asia, in a prospectus filed with the Securities and Exchange Commission, trumpets itself as having the potential to become the biggest producer of high-grade bituminous coal in the Phlippines. Coal Asia plans to list 800 million shares on the Philippine Stock Exchange’s first board by the fourth quarter of 2012. It will be the second coal producer to list in the stock exchange after Semirara Mining Corp. offered its shares to the public in the 80’s.
It is too early to predict how Coal Asia will perform in and after its listing debut in the stock market. The company obviously wants to jump on the bandwagon started by Semirara, DMCI Holdings Inc., Aboitiz Power Corp. and Aboitiz Equity Ventures Inc. Share prices of these four companies recently jumped at least five times because of increasing demand for electricity and an unstable power supply.
Coal Asia, the parent company of Titan Mining and Energy Corp., which owns mining exploration and development rights in Davao Oriental and Zamboanga Sibugay provinces, is offering its shares at par (P1), or at the same price as the company’s incorporators bought them. The company is an affiliate of the John Tiu Ka Cho, or JTKC, Group of Companies, which has interests in the banking and steel businesses.
Coal Asia has coal assets worth P12.5 billion based on independent valuation report prepared by Multinational Investment Bancorporation in May 2012.
It finds itself in the right place at the right time with the expected explosion in demand by large-scale power producers racing to establish their coal-fired generating plants and cement plants preparing for the impending growth of Mindanao.
Coal has become a major fuel, firing approximately 43 percent of the world’s electricity production. Coal demand is expected to remain up until 2035. Energy Secretary Jose Rene Almendras is also pushing for base load power generation such as coal to address the power deficit in Mindanao, which is heavily dependent on hydro. Hydro plant’s seasonality has caused widespread power outages in Mindanao in the dry season.
Coal Asia, meanwhile, plans to use P726.87 million in net proceeds from the IPO to bring its Davao Oriental mine into production by 2014 and the Zamboanga Sibugay mine by 2015.
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