Global Ferronickel cancels planned Zambales acquisition
Global Ferronickel Holdings Inc. has cancelled its plans to expand its operations to include Zambales after an agreement to acquire a nickel mining firm failed to materialize as advertised.
In a disclosure to the Philippine Stock Exchange, Global Ferronickel said its board has approved the termination of the Memorandum of Agreement dated November 27, 2014 to acquire 100 percent of Ferrochrome Resources, Inc.
The agreement was between the Global Ferronickel and GHGC Metallic Ore Resources, Inc., Roy Borromeo, Dante R. Bravo, Kirby Erin Ng, Ceferino S. Paredes, Jr., Arnulfo S. Santiago, Joseph C. Sy, Gu Zhi Fang, and Xin Jun Xun.
“This is due to the non-fulfillment of the conditions enumerated in the MOA,” the company said.
Global Ferronickel had earlier announced plans to raise as much as 31 billion from a follow- on offering slated in March or April to fund the expansion and acquisition of nickel and mining assets.
The firm is selling up to 7.09 billion shares consisting of 3.08 billion primary shares, 3.08 billion secondary shares and up to 924.72 million shares to cover overallotment at a maximum offer price 4.38 per share. UBS is the sole global coordinator, international bookrunner, lead manager as well as domestic lead underwriter and bookrunner of the offering.
Net proceeds from the offer will fund capital and project expenditures for its business expansion through exploration and acquisition of other nickel and mining assets and payment of existing debts.
About half of the gross proceeds or $80 million will be used to finance the acquisition of Ferrochrome Resources Inc (FRI) and Southeast Palawan Nickel Ventures Inc (SPNVI).
The firm will allot another $50 million to explore and develop the mines owned by FRI and SPNVI located in Zambales and Palawan, respectively.
It will also earmark $20 million for working capital, $15 million to explore and develop its Cagdianao mine in Surigao del Norte, and $5 million for research and development.
The company operates two open pit deposit sites within its lateritic nickel mine in Cagdianao, Claver, Surigao del Norte. It has identified additional sites at Cagdianao that have yet to be exploited.(JAL)
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