Benguet Corp to raise P440 million via private placement

MANILA, Philippines — Benguet Corp. is raising P440 million through the subscription of new shares by Red Earth Mineral Resources Corp. to bankroll its existing projects that include mining and agriculture.

In a regulatory filing, Benguet said its board of directors approved Red Earth’s proposal for a private placement in the mining firm.

The first part of the private placement involves the subscription of 90 million shares from the miner’s unissued shares. The first part would be broken down as 53 million Class A common shares and 37 million Class B shares, both priced at P4 per share.

For the second part of the private placement, Red Earth would subscribe to 20 million shares from Benguet’s increase in capital stock. Of the shares, 13 million would be Class A common shares while the remaining seven million would be Class B common shares, also priced at P4 each.

The subscription price was based on the company’s 30 trading days volume-weighted average price plus premium prior to the Oct. 29 special board meeting, the firm said.

“At the conclusion of the private placement, the public ownership percentage is 39 percent of the outstanding capital,” Benguet said.

The company said the additional capital infusion would be used for the development of its various projects such as the Pantingan Gold Project, Bolco Gold Project, Solar Project and Agribusiness Project, among others.

Last week, Benguet executed a mutual rescission agreement with its remaining creditors to terminate the debt restructuring agreement covering its P1.4-billion loan that was initiated in 1993.

The firm said it has settled a “substantial” portion of the loans over the years. The company added that the remaining creditors have opted to transact directly with the company including leveraging the debts for investment purposes.

Earlier this month, Benguet said it would continue mining in Bataan through the Pantingan gold project after securing a 25-year renewal of its mineral production sharing agreement from government regulators.

Benguet saw its net income in the first half fell by 39 percent on an annual basis to P267.7 million from P438.6 million amid falling nickel prices.