Lepanto okays P850-M stock rights offering

The board of directors of Lepanto Consolidated Mining Co. has approved a stock rights offering estimated to raise about P850 million, the mining firm said in a disclosure to the Philippine Stock Exchange.

Lepanto said the rights offering will entitle shareholders on record as of Oct. 5 one share for every five shares held at P0.20 per share. The issue is expected to start on Oct. 25 although this is still subject to the approval of securities regulators.

Proceeds from the offering will be used to settle the company’s accounts with suppliers and local creditors.

Lepanto A shares fell 6.1 percent to P0.31 yesterday while Lepanto B shares dropped 2.9 percent to P0.33. A shares are exclusive to Filipino investors, while B shares are open to both Filipino and foreign investors.

Lepanto is scouting for foreign investors to jumpstart the development of its mines.

Despite the return-to-work order issued by the Labor Department, Lepanto said operations at its minesite have not quite returned to normal due to the insistence of the Lepanto Employees’ Union (LEU)that the company reinstate the union officers and members who led and participated in the recent illegal strike.

Lepanto’s workers went on strike in May due to a deadlock in negotiations for pay increases. They specifically asked for a P27 salary increase for the first year, P27 for the second year and P40 for the third year, and other benefits such as the supply of liquefied petroleum gas and two sacks of rice every year.

Last month, Zijin Mining Group Co. Ltd., the largest gold producer in China, expressed interest in investing in Lepanto. Zijin is listed at the Hong Kong Stock Exchange.