SMIC cements control over Atlas Mining

SM INVESTMENTS Corp. of Henry S. Sy, Sr., the country’s richest man, is cementing its control over Atlas Consolidated Mining and Development Corp. with the acquisition of new shares worth P1.24 billion in the listed miner.

Atlas told the stock exchange in a disclosure on Tuesday its board of directors approved last Dec. 7 the issuance of 313.63 million new shares to SM as well as Ramos-owned firms Anglo Philippines Holdings, Inc. and Alakor Corp. at P4.3842 per share, raising P1.375 billion.

The Sy-led holding firm will subscribe to 282.26 million common shares, or 90% of the new shares, that will hike its ownership in Atlas to 37.26% from 29.33% upon completion of the transaction. The Ramos- controlled corporate vehicles will decrease their combined share to 27.49% from 30.12%.

SM, which has core businesses in banking, property and retail, bought into Atlas in 2011 after acquiring 17.9% of the miner’s expanded capital then purchased more shares in the subsequent years, citing good prospects and potential returns, according to previous reports and disclosures.

“We are merely subscribing to the increase in authorized capital stock which results to a slight increase in effective interest,” SM Senior Vice-President for Investor Relations Cora P. Guidote said in a mobile phone message on Tuesday.

Alakor will reduce its stake in the miner to 19.17% from 21.75%, while Anglo’s share will slide to 8.32% from 8.37%. Likewise, public ownership in Atlas will decline to 35.25% from 40.55%.

The new shares will be issued from the proposed increase in Atlas’ authorized capital stock to P8.5 billion.

In February, Atlas gave the go signal to beef up its authorized capital stock from P3 billion to P6 billion, which were approved by stockholders in April. No shares were issued from the capital increase.

Last month, Atlas cleared another round of capital stock hike that will boost its capitalization by P2.5 billion to P8.5 billion, divided into 8.5 billion common shares with a par value of P1 each.

“The increase in authorized capital stock will enable Atlas to have sufficient unissued shares of stock to allow the corporation to issue warrants and the underlying shares of stock as a result of the exercise of the warrants coupled with the flexibility to raise fresh funds,” Atlas said.

Proceeds from the share issuance will be used to partially pay off debt amounting to P1.8 billion that bankrolled the P3.6-billion waste stripping program of Atlas’ wholly owned subsidiary Carmen Copper Corp.

The parties have yet to execute the proposed share issuance, Atlas said. The transaction will be implemented after obtaining the clearance from stockholders in a special meeting on Feb. 21, 2017 after which it will be submitted to the Securities and Exchange Commission (SEC) for approval.

Atlas cut its nine-month losses by 64% to P470 million, as revenues rose 4% to P8.7 billion on higher shipment volumes.

Shares in Atlas were unchanged at P4.84 apiece, while shares in SM fell 2.04% to P624 each on Tuesday.