Semirara Mining launches share buyback

Semirara Mining and Power Corporation is starting a buy back program today (December 8) for R2 billion worth of its shares after the price took a hit from Congress’ plan to impose a hefty tax on coal.

In a disclosure to the Philippine Stock Exchange, the firm said its Board of Directors approved the buy back program at a special meeting held yesterday.

The buy-back program aims to “enhance shareholder value and to provide stockholders an opportunity to liquidate their investments.”

Under the plan, SMPC will buy back up to R2 billion worth of its common shares based on trading price at the open market through the trading facilities of the PSE.

Currently, SMPC has an authorized capital stock of 10 billion shares of which 4.26 billion shares have been issued and 4.26 billion shares are outstanding while 3.46 billion are held as treasury shares.

SMPC shares were trading at a little above R42.00 per share when the Senate proposed to include tax on coal in the government’s tax reform program. This prompted investors to sell down the shares to its year low of R34.70 per share.

While SMPC has started out as a purely coal mining company, its diversification into the power generation industry has resulted in the firm deriving about 40 percent of its revenues from the sale of electricity.

SMPC said it has tripled its royalty payments to the Department of Energy (DOE) to R1.69 billion in the first half of 2017 from R575 million during the same period last year.

The firm said the surge in government remittances was driven by the SMPC’s increased production and expanding operations.

The company is targeting an annual coal production of 16 million metric tons in the next two to three years. Last year, SMPC produced 12 million metric tons of the indigenous fuel.