Coal Asia eyes IPO in Q4

MANILA, Philippines - Coal Asia Holdings, holder of the country’s second largest coal reserves, is seeking to raise around P800 million through a maiden offering of shares possibly in the fourth quarter of the year.

Coal Asia Holdings is the parent company of Titan Mining and Energy Corp. (TMEC), which owns mining exploration and development rights in Davao Oriental and Zamboanga Sibugay.

The company filed with the Securities and Exchange Commission yesterday its registration statement, covering the sale of 800 million shares at P1 apiece. The shares will be listed on the first board of the exchange.

Abacus Capital & Investment Corp. will serve as the sole lead underwriter for the offering.

Coal Asia, which is seen to have the potential to become the biggest producer of high-grade bituminous coal, is on track to begin commercial production of 600,000 metric tons of high-grade coal per year in 2014. Its production should be enough to meet the continued rising demand for thermal coal fuels both in the domestic and international power-generating sector.

A recent preliminary feasibility study on a 7,000-hectare area in Davao concluded the economic viability of the site with an observable coal reserves yield factor of 28,000 tons per hectare which translates to an estimated market value of P23.8 billion.

An earlier Philippine Mineral Reporting Code standard geological report, done in April 2012, identified total potential coal resource of 120 million metric tons.

Coal Asia has secured off-take contracts both here and abroad. It is now eyeing to export to India, Japan, Taiwan, Hong Kong and Vietnam.

Company officials believe they are in the right place at the right time because Coal Asia’s resources are located in mineral-rich Mindanao.

Coal Asia hopes to capitalize on the expected explosion in demand by large-scale energy producers racing to establish their coal-fired energy generating plants as well as for cement plants already in place in the region.