ATLAS Consolidated Mining and Development Corp. will increase its authorized capital stock to P8.5 billion from P3 billion by issuing new shares to key investors, which is expected to generate P1.375 billion in fresh funds that will be used to partially settle its debt obligations.
In a disclosure to the Philippine Stock Exchange on Tuesday, Atlas said its board of directors has approved a call for a special stockholders’ meeting on February 21, 2017 to approve the increase in authorized capital stock to provide for the subscription and issuance of shares to big investors including SM Investments Corp. (SMIC), Anglo Philippines Holding Inc., and Alakor Corp.
The P5.5-billion added capital is equivalent to 313.626 million shares, of which 282.263 million will be allotted to SMIC, 25.09 million shares to Anglo, and 6.272 million shares to Alakor.
The 313.626 million new shares from the capital hike will be issued to the three investors for P4.3842 per share, for a total transaction value of P1.375 billion.
After the transaction, Henry Sy-led SMIC will have an effective 37.26 percent stake in Atlas, while Ramos family-owned Alakor and Anglo will have 19.17 percent and 8.32 percent shareholdings, respectively.
Also because of the transaction, the public float will be diluted to 35.25 percent from 40.55 percent.
The proposed transaction shall be implemented once the company gets the nod of its shareholders at the special shareholders’ meeting (SSM) on February 21 next year, as well as the approval of the Securities and Exchange Commission.
“The proceeds will be used to partially pay the debt Atlas incurred in 2015 of P1.8 billion. The debt was used to fund the 2015 Waste Stripping Program of its wholly-owned subsidiary, Carmen Copper Corporation (CCC), with a total cost of P3.604 billion. The remaining cost not funded by debt was financed from cash generated from operations,” Atlas said in the disclosure.
“The corporation will seek a waiver of the conduct of a rights or public offer for the (313.626 million) shares subscribed by a majority vote representing the outstanding shares held by the minority shareholders present or represented at the proposed SSM,” Atlas said.
A one-hour trading halt was implemented on Tuesday from 9:00 a.m. to 10:00 a.m. to give the investing public time to digest the information and corporate changes.
Incorporated in 1935, Atlas is a listed firm engaged in mining and shipping copper ores.