Global Ferronickel hikes capital to attract long-term investors
GLOBAL Ferronickel Holdings, Inc. (GFNi) said it has increased its authorized capital stock to P12.56 billion, in part to make the shares more appealing to longterm investors.
“The board approved the amendment of the Articles of Incorporation to increase the authorized capital stock of the Corporation to P12,555,020,001.30 ( with) 11,957,161,906 common shares with an increased par value of P1.05 per share,” Global Ferronickel said in a disclosure released to the local bourse on Tuesday.
GFNi Senior Vice- President for Investor Relations Ramon Peter E. Adviento said that the move is a means of widening the company’s investor base.
“It’s a way to align our par value with the mining industry and improve marketability of stocks to a broader base of investors,” Mr. Adviento said in a phone interview.
“What we’ve noticed is that day stock traders are mostly our buyers. We’re looking at longer-term investors,” said Mr. Adviento.
Dante R. Bravo, president of GFNi, said the move has nothing to do with the slump in the company’s first half results.
“No it’s not. It has been really part of what we have to do... just to make the par value above P1.00. We want to make it at a level with the industry,” Mr. Bravo said in a phone interview.
GFNi lost P281.88 million in the first half, against a year-earlier profit of P152.97 million.
FOLLOW-ON OFFERING
Mr. Bravo also clarified that the action has nothing to do with its earlier plan to conduct a followon offering to finance an expansion which includes, among others, the establishment of processing plants for nickel ore.
The declaration of a follow-on offering will depend on when the company believes the uncertainty clouding the mining industry has cleared up, according to Mr. Adviento, who cited the regulatory environment, particularly the audit being conducted by the Environment department, among others.
Asked on whether the followon offering may take place within the year, Mr. Bravo said: “No. It will take a while.”