Atlas Mining plans to raise $390M

MANILA, Philippines - Atlas Consolidated Mining & Development Corp. (ACMDC) is planning to raise $390 million through debt and equity, which will eventually allow the entry of a new investor group after buying out its foreign partner’s stake in unit Carmen Copper Corp.

In a disclosure to the Philippine Stock Exchange (PSE), Atlas said its board approved its acquisition of the combined 45.54-percent stake of CASOP Atlas Corp. and CASOP Atlas B.V. in Carmen Copper, which operates the 1,674-hectare Toledo copper mine complex in central Cebu province.

Sources said Atlas will be taking in a strategic partner to help it fund the purchase and support Carmen Copper’s general working capital requirements.

Atlas will gain 100-percent ownership of Carmen Copper upon completion of the deal worth $368 million.

Atlas has tapped BDO Capital & Investment Corp., a unit of Banco de Oro Unibank and Evercore Partners as financial advisers and deal arrangers.

The company sought voluntary suspension of trading in its shares from Friday, June 24 to Monday, June 27. The stock has risen by almost 20 percent this week, hitting a four-year high of P20.15 last Thursday prior to closing at P20 each share.

While some analysts are convinced that the Manuel V. Pangilinan-led group is the incoming investor of Atlas, industry observers say it could be another big corporation wanting to make a presence in the mining industry.

Some are speculating that it could be the group of retail tycoon Henry Sy, which provided a $10-million convertible loan facility to Atlas through its banking arm Banco de Oro Unibank Inc.

Under the terms of conversion, the principal amount is convertible into Atlas shares at P18 per share at the option of BDO and at any time during the term of the convertible loan. It may also be converted at the option of Atlas, provide that the volume weighted average price of Atlas shares at the PSE does not fall below P21 for 20 consecutive trading days.

Atlas will also issue warrants which grant BDO the right to subscribe to such number of Atlas shares having a total value equal to 20 percent of the principal amount of the convertible loan based on a per share price of P18.

“The trading suspension will enable Atlas to provide its shareholders and the investing public with equal opportunity to examine the details of the transaction,” Atlas said.

Carmen Copper reported a turnaround in its financial performance last year, posting a net income of P670 million as against a net loss of P1.66 billion in 2009. Core net earnings reached P1.248 billion.