Coal Asia IPO Priced at Par Value for 800M Shares
Coal Asia Chairman Harald Tomintz confirmed that the company's planned initial public officer (IPO) will afford the investing public the rare opportunity of buying in at the same price as the company's incorporators. The company plans to list 800 million shares at the Philippine Stock Exchange's first board by the fourth quarter of 2012.
Tomintz was invited to join Coal Asia Holdings Inc. owing to his wealth of experience stemming from his past association with the Semirara Coal Corp., prior to its privatization in 1997.
The company continues to draw interest from potential strategic and financial investors from the power generation and cement industries, as well as investment funds with the objective of owning a stake in Coal Asia as a means to ensure continuous supply of coal and possibly hedge against another potential significant run-up in coal prices.
The company is evidently keen on ensuring the timely development of its high-grade bituminous coal mines as they are strategically located in Mindanao, where there is a rush to establish critically needed power capacity, giving Coal Asia a leg up on opportunities for long-term supply agreements for thermal coal in the region.
And while the company previously confirmed having bagged off-take contracts both here and abroad, Coal Asia also plans to supply steam-grade coal to cement plants, canneries, and manufacturing plants that have converted their diesel-powered plants into coal-powered plants to mitigate costs.
The P726.87 million net proceeds from the IPO is earmarked to bring its Davao Oriental mine into production by 2014 and its Zamboanga Sibugay mine by 2015. Of the proceeds from the IPO, P100 million will be spent for the completion of the exploration and feasibility study of the Davao Oriental mine, P400 million for the development of the Davao mine, and the balance for continued exploration at the Zamboanga Sibugay mine and for working capital requirements.
Coal Asia holds the second largest coal reserves in the country with coal assets worth P12.5 billion based on an independent valuation report by the Multinational Investment Bancorporation. And mine developments are on track with commercial production of 600,000 metric tons of high grade coal per year scheduled for 2014.