MANILA, Philippines - Retail magnate Lucio Co.,which owns the Puregold chain of supermarkets, is taking over publicly-listed Alcorn Gold Resources Corp. following his subscription to a quarter of the oil and gas exploration holding company’s increase in capitalization.
In a disclosure to the Philippine Stock Exchange, Alcorn said Co will have a combined 66 percent stake in the firm after it obtains the Securities and Exchange Commission’s nod on its plan to raise its authorized capital stock from P700 million to P3 billion.
Of the P2.3 billion capital increase, Co subscribed to P575 million equivalent to 57.5 billion shares at a par value of P0.01.
Market analysts said Co is expected to use Alcorn as his vehicle for backdoor listing and that the Puregold retail stores might be infused into Alcorn.
The Puregold Price Club has over 20 outlets across Metro Manila and nearby provinces. The first Puregold store, located in Shaw Boulevard in Mandaluyong, was put up in 1998.
Alcorn said the new capital will be used to fund possible acquisitions. The company is currently studying its possible participation in other industries and projects that are compatible to its long-term plans and funding position. If necessary, the company would use additional capital to finance exploration activities and maintenance of its various concession areas as well as to support general and administrative requirements.
Alcorn was the market’s top gainer yesterday, rising 15.8 percent to close at P0.011 from P0.0095 last Friday. A total of 184 million shares changed hands valued at P1.86 million.
As of end-December 2009, Alcorn had a cash position of P225.486 million, which is sufficient to support its operations and project commitments for the next 12 months
With a market capitalization of P567.5 million, Alcorn Gold is engaged in the exploration, development and production of oil and gas, as well as metallic and non-metallic reserves. The company has participating interests in a number of petroleum and mineral properties in Palawan, the Visayas region and Mindanao and in Gabon, West Africa.
The company reported a net income of P9.3 million last year, up 91 percent from 2008 level.
Bulk of the increase in net profit was due to the income from the sale of petroleum interest amounting to P31 million.
From a gain of P9.8 million last year, Alcorn incurred a foreign exchange loss of P4.5 million this year, mainly due to the appreciation of the peso against the dollar. Other income contributed 13 percent to the gross income of the company, consisting of dividend and income from sale of stocks.
Income from the sale of petroleum interest reached P31 million, representing 60 percent of the total revenues. Among the company’s oil interests, Service Contract 14 (SC 14) in North West Palawan is considered the largest oil discovery in the country’s petroleum exploration history with more than 48 million barrels of oil produced from its wells. However in December 1995, the consortium decided to temporarily suspend production operations in the West Linapacan oil fields due to high production costs, low production levels and low prevailing price of oil.