Geograce undertakes quasi-recovery to wipe out P2.4-B deficit

MANILA, Philippines - Geograce Resources Philippines Inc., a listed mining company controlled by businessman Jerry Angping, is undertaking a quasi-reorganization to wipe out its deficit amounting to P2.4 billion as it prepares to take in strategic investors.

In a disclosure to the stock exchange, Geograce said the quasi-reorganization will be made through the reduction of the par value of the company’s shares from P1 to P0.30, resulting in an additional paid-in capital (APIC) of P1.78 billion and receivables of P666.69 million.

“The total expected APIC of P2.45 billion arising from the quasi-reorganization of the company’s capital structure shall be used to wipe out the company’s deficit,” Geograce said.

The accumulated deficit includes losses incurred in previous years prior to its conversion from a real estate holding company to a mining company.

“Erasing the deficit would effectively show a more fair picture of the company’s operations as a mining company. Wiping out the deficit is part of the company’s effort to obtain a more favorable balance sheet that would attract strategic investors for its operations,” Geograce said.

The quasi-reorganization will be submitted for approval of the company’s stockholders meeting scheduled on Dec. 9.

The company earlier raised close to P1 billion through the issuance of new shares to private investors.

Proceeds from the private placement would be used to fund the exercise by the company of its options over the Masbate mining claims.

Geograce tapped Vale Exploration Philippines Inc., an affiliate of Vale S.A., considered the world’s largest producer of iron ore, as partner for the exploration activities in Masbate.

The Masbate claims cover an area of 84,046 hectares. 

Geograce is primarily engaged in the exploration and development of mineral resources in the Philippines with particular focus on gold and nickel mining activities located in Zambales, Palawan and Bukidnon.