Itogon-Suyoc may be used for backdoor listing

Itogon-Suyoc Mines Inc. (ISMI) denied yesterday knowledge of any plans to use the company for the backdoor listing of oil giant Pilipinas Shell Petroleum Corp., as persistent market rumors caused the hardly-traded stock’s price to surge.

"We reiterate our disclosures that ISMI is not aware of any material information that may affect the value and trading of its securities," ISMI corporate information officer Anadebia Vasquez said.

"Regarding the rumor about Shell using ISMI as a corporate vehicle for backdoor listing, this we are not aware as well," she added.

At the close of yesterday’s trading, Itogon-Suyoc "A" shares closed slightly lower at P0.045, down by P0.002 while its "B" shares went up P0.001 to P0.047.

Trades, however, were heavy as its "A" shares entered the top 20 most active list with nearly one percent of total transactions. Its "B" shares, on the other hand, landed as the 10th biggest gainer for the day, despite the overall market dropping 1.51 percent.

Rumors of a possible backdoor listing — where big companies buy out existing, but inactive issues and eventually list their own shares, skipping a costly initial public offering (IPO) in the process — floated as oil companies like Shell and Caltex, along with other big cap companies were being prodded to list their shares at the stock market to inject more liquidity and spur trading at the lethargic bourse.

Among the recent cases of backdoor listing involved Lucio Tan companies Tanduay Holdings (through Asia Pacific Equity Corp., or APEC) and Philippine Airlines (through Baguio Gold Holdings Corp.).

Established in 1925, Itogon-Suyoc is one of the country’s oldest mining firms with claims spanning a large area in the northern part of Luzon, particularly in the Benguet-Mt. Province area. In June 1985, another mining firm, Benguet Corp., acquired a 54.5 percent majority stake in the company.

"We have two large mining properties east and north of Baguio City, Itogon and Suyoc districts, accordingly, with sizeable remaining underground resources from the ore vein systems and highly prospective areas," Vasquez said.

Listed in 1975, the company is also engaged in the manufacture and sale of gold, silver, copper, zinc, lead, platinum, brass and iron.

However, last January, ISMI appeared on the brink of closing shop as it continued to sink in deep financial straits.

In a letter to the Philippine Stock Exchange, ISMI advised of a further reduction in manpower effective Jan. 18 due to "indefinite suspension of mining operation due to continuous financial losses."

The company said it had also informed the Labor Department that it would lay off 49 employees since it could not anymore sustain mining operations as the currency turmoil, the de facto devaluation of thepeso and high interest rates combined to place a heavy strain on the company’s financial condition.