Nickel Asia kicks off roadshow for P8-billion IPO

MANILA, Philippines - Nickel Asia Corp., the country’s largest nickel mining company, kicked off yesterday its domestic marketing roadshow to trumpet a maiden share sale that could fetch as much as P8.05 billion in gross proceeds.

Nickel Asia, controlled by businessman Manuel Zamora Jr. and Japan’s top nickel producer Sumitomo Metal Mining Co., has obtained the approval of both the Securities and Exchange Commission and Philippine Stock Exchange to issue up to 304.5 million common shares through an initial public offering (IPO) at a price range of between P14.95 to P23 each share. As much as 45.675 million shares have been set aside for the greenshoe or over-allotment option.

The company said 70 percent of the offer shares, or up to 213.15 million shares, will be sold in the international markets while up to 91.35 million shares will be offered locally.

UBS AG and CLSA Ltd. are the joint bookrunners for the issue while ATR Kim Eng Capital Partners, SB Capital Investment Corp. and UBS Investments Philippines have been tapped as underwriters for the domestic offering.

Meanwhile, the international roadshow and bookbuilding will run from Oct. 26 to Nov. 5 while the domestic offer is scheduled on Nov. 9 and will last until Nov. 15. Listing of the company’s shares has been set on Nov. 22.

The final offer price and size of the offering will be known on Nov. 8.

Nickel Asia owns majority stakes in six mining operations throughout the Philippines. It has interests in the Rio Tuba nickel mine project located near the southern tip of Palawan Taganito mine located in the province of Surigao del Norte Cagdianao mine in the Dinagat Islands; and Taganaan mine which lies approximately 25 kilometers to the east of Surigao City off the northern end of Mindanao.

The company’s principal business involves selling nickel laterite ore to customers in Japan, China and the Philippines.

The company said it will use the proceeds from the IPO to fund investments in Taganito amounting to P3.98 billion; exploration activities (P393.63 million) as well as acquisition of new properties (P46.31 million). Other proceeds will be used to beef up the capitalization of subsidiary Cordillera Exploration Co.

The Taganito mine is one of the priority projects of the government, which aims to raise $13 billion in investments in the mining industry by 2013.

Zamora owns 23.49 percent of Nickel Asia while Sumitomo Metal holds 18.83 percent. Other shareholders of the nickel company are investment banker Luis Virata with a 13.63 percent stake, Pacific Metals Co. Ltd. (1.13 percent), Mantra Resources (4.27 percent) and NI Capital Corp. (2.15 percent).

As of June 30, 2010, Nickel Asia’s net book value (total assets minus liabilities divided by the total number of shares outstanding) was P14.647 billion or P14.80 per share.

In the six months ending June this year, Nickel Asia’s net earnings amounted to P694.56 million, more than 20 times the P33.3 million reported in the same period a year ago and has already surpassed profit for the whole of 2009.