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The Philippine Stock Exchange has approved the maiden public
offering of Sultan Mining and Energy Development Corp. (Smedc),
which would be conducted two weeks from now.
In a statement, the local coal mining and
trading firm said it would offer shares worth P480 million, or 33.5
percent of the company to investors during a road show on June 18.
It will sell its shares to the public for the first time from June
26 to July 2, and subsequently list in the local bourse on July 9.
Sultan’s shareholder Maxinvent Trading Corp.
gave underwriter Asian Alliance Investment Corp. an option to
purchase or place up to 48 million SMEDC shares, or 10 percent of
the offer to cover over-allotments.
Proceeds of the offering will be used to
partially finance Sultan’s capital expenditures related to
additional exploration of its coal operating contract (COC) areas,
improvements and expansion of coal extraction and processing
facilities, and pay existing bank obligations as well as beef up
working capital requirements.
Rufino Bomasang, Smedc vice chairman, said the
maiden share offering “comes at a time when there is strong demand
for coal in both the domestic and global markets. This trend has
thus raised interest in coal mining companies worldwide.” This
gave the company the push to brave the uncertain markets that have
been made volatile by concerns on oil and food prices.
To meet rising demand and take advantage of
climbing prices, Smedc is increasing production of its mine in
Bislig, Surigao del Sur, to at least 300,000 metric tons this year
from less than 20,000 MT last year. The Bislig mine is now in full
commercial production after the company purchased more heavy
equipment to simultaneously develop and operate several open pits to
dig up surface coal.
Using the IPO proceeds, additional open pits
will come on stream that will allow the SMEDC to steadily increase
production volume.
“For April alone, the production volume of
22,000 metric tons was a 120-percent increase from the previous
month. It was also greater than the first quarter’s production for
2008,” Anthony Buyawe, chief finance officer, said. Last month,
output grew to 25,000 MT.
-- Likha C. Cuevas-Miel
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