GLOBAL Ferronickel Holdings Inc. (FNI) said it has obtained clearance from the Securities and Exchange Commission (SEC) to raise as much as P2.025 billion through a follow-on offering, which may be conducted as early as next month.
The SEC said FNI’s follow on-offering application was approved during an en banc session on Tuesday. FNI plans to sell 250 million shares priced at a maximum of P8.10 each.
Dante Bravo, FNI president, told The Manila Times he expects the follow-on offering to take place as early as April.
“We’re still awaiting the approval by the PSE [Philippine Stock Exchange]. We’ll take it from there as to the timeline to complete the follow-on offering. Our regional coordinator is Religare Capital while the underwriter is PCCI [Philippine Commercial Capital Inc.],” Bravo said in a text message.
A follow-on offer is an issuance of stock subsequent to a company’s initial public offering.
Net proceeds of about P1.95 billion will be used by FNI to infuse capital into its subsidiary, Platinum Group Metals Corp. (PGMC) and for working capital requirements at its CAGA mines. PGMC will use about P450 million of the proceeds to partially pay its loan from the Taiwan Cooperative Bank (P450 million).
Bravo said the group believes this is the right time to sell shares despite the controversial pronouncements of Environment Secretary Gina Lopez on the mining industry.
Asked about the stigma of trading mining shares at present, the FNI president said: “We believe otherwise as the consensus among investors is that they are bullish about the nickel space and they are keen on investing in good nickel mines.”
“As we have seen in recent developments, notwithstanding the controversial pronouncements of Secretary Lopez, the government is committed to protecting the industry, honoring the mining contracts, and enforcing the rule of law particularly on due process,” Bravo said.
“Of course, those who are found to have certain violations, then those concerned will have to address them. But the latter should not be taken as undermining the industry. Rather, we see it as elevating the standards of the industry in terms of compliance,” he added.
The nickel miner is not included in the Department of Environment and Natural Resources’ (DENR) list of suspended mining companies.
PGMC is a 99.98 percent subsidiary of FNI, the second largest nickel ore producer in the Philippines. The company has 4,376 hectares of reserves in i ts Surigao del Norte mine as well as 2,835 hectares worth of reserves in its Ipilan mine. The company debuted on the PSE via backdoor listing in January 2015.