Recto-led group buying into Ajo-net via P1.3-billion share swap

MANILA, Philippines - A group led by former Lepanto Mining president Ramon Recto is buying into listed investment holding firm Ajo-net Holdings Inc. through a share swap valued at P1.3 billion.

Ajo-net told the Philippine Stock Exchange that its board approved the change of corporate name to Marcventures Holdings Inc. with the expected acquisition by Marcventures Mining & Development Corp. (MMDC) of a 97-percent stake in the holding company.

Under the proposed deal, MMDC shall subscribe to 45 billion shares of Ajo-net at the new par value of one centavo or a total of P450 million out of the increase in capitalization from P200 million to P2 billion.  Out of the capital hike, MMDC shall infuse P350 million in cash and the balance of P100 million shall be payable by way of assignment of 153,846 MMDC shares.

MMDC, a mining firm based in Surigao del Sur, will subscribe to an additional 115 billion shares in consideration for the assignment of 1.769 million MMDC shares at an agreed value of P1.15 billion.

Asian Alliance Investments Corp. is the financial advisor for the transaction.

Augusto Serafica Jr., executive director of Asian Alliance, said the deal also involves Ajo-net’s transfer to MMDC of 499 Metroclub certificates including its P17.5-million obligation to Philippine Townships Inc. 

Founded on June 27, 1975, Metroclub is a non-profit sports membership club strategically situated on a 12,660-square meter lot right across the Rockwell Center in Makati City.

Prior to the issuance of shares to MMDC, Ajonet would undertaking a corporate reorganization aimed at wiping out its capital deficit.  The plan involves the reduction of its capital stock from P2 billion to P200 million and par value of its shares from 10 centavos to one centavo per share. Such decrease will create an additional paid-in capital that will be applied to eliminate the accumulated capital deficit.

Following the capital decrease, Ajo-net will raise its authorized capital to P2 billion divided into 200 billion common shares at one centavo par value.

MMDC has a mineral production sharing agreement to mine 4,799 hectares in Cantilan, Surigao del Sur for nickel and gold.

Serafica said with the change in ownership, Ajo-net will shift its focus on mining. The company is targeting to start commercial mining operations hopefully in the first half of the year with around P200 million to P250 million set aside for capital budget.

Ajo-net is aiming to produce 600,000 metric tons of nickel ore in the first year of operations. This is expected to increase to  800,000 MT and 1.2 million MT in the second and third years, respectively.