|
Sultan Mining and Energy Development Corp. will push back its maiden
share offering slated this month to allow it “to complete and
present its interim operating results as of the first half of 2008
to prospective investors,” according to its underwriter.
The coal-mining firm told the investing public
that its underwriter, Asian Alliance Investment Corp., has postponed
the initial public offering of P480 million originally set on June
26 up to July 2 to the latter part of July.
In a statement, SMEDC said waiting for the
results of its performance in the first half will assure investors
of the soundness of putting their money in the company as the report
will show its “strong earnings capacity”.
Credit crunch worries, US economic slowdown and
rising inflation have been pushing risk-averse investors and foreign
funds to flee the country for the past five months as shown by the
net foreign selling of about P18.8 billion from January to May this
year. This was a huge turnaround from the P46.56 billion in net
foreign buying during the same period last year.
To raise fresh funds, SMEDC will sell 480
million new common shares with par value of P1.00 each to the
public. This will allow the company to increase its current
production of 800 to 1,000 tons per day by 20 percent to 60 percent
to meet all the present demand and those that are in the pipeline.
The firm has also earmarked P200 million for
capital expenditures and P160 million for working capital, which
would go to equipment acquisition, additional equipment lease
arrangements as well as the expansion and improvement of its mine in
Argao, Cebu. About P78 million would go to debt retirement.
SMEDC may also clinch a coal supply contract
with three foreign firms as the companies try to lock in supply of
the commodity amid climbing prices apace with demand. The possible
contracts will bode well for the company that is set to sell its
shares for the first time next week as geopolitical factors, energy
security and surging oil prices force firms to shift from
petroleum-based fuels to coal for their energy needs. The firm is
also looking at selling coal to China and India.
These companies may require at least 300,000
tons of coal, more than the current production level of SMEDC. It
currently has exclusive rights to over 10,700 hectares of coal
bearing properties, with 62 million metric tons of coal reserves and
resources in its mine tenement in Bislig, Surigao del Sur. The
company also told potential investors that advanced exploration
suggest that its Aragao, Cebu mine has 2 million MT of high-grade
coal in Argao.
It also holds a minority interest at 12.5
percent in Sultan Energy Phils. Corp., the company that mines the
Daguma deposit, which gives SMEDC participation in “potentially
the largest open pit coal resource in the country,” the firm told
investors.
The company is currently supplying PNOC-Energy
Development Corp., General Tuna, Philbest Canning Corp., cement
firms Lafarge and Holci. It is also negotiating supply agreement
with Toledo Power Corp. and Glencore Far East (Phil.) AG.
|
