Local mining firm Sultan Mining & Energy Development Corp. has secured the approval of the Philippine Stock Exchange to list P480 million worth of shares on the bourse.
With the approval, Sultan will embark on a roadshow beginning June 18 with the initial public offering (IPO) expected to kick off on June 26.
Asian Alliance Investment Corp. is the lead underwriter for Sultan Mining’s IPO which will run until July 2. Trading in shares of Sultan will start on July 9.
The IPO consists of 480 million new common shares priced at their par value of P1 per share. The offer shares represent 33.5 percent of Sultan’s outstanding capital post-IPO.
To cover over-allotments, Asian Alliance has been granted an option by shareholder Maxinvent Trading Corp. to purchase up to 48 million shares of Sultan or 10 percent of the offer.
Net proceeds from the offer will be used by Sultan to partially fund its capital expenditures related to additional exploration of its coal operating contract (COC) areas, improvements and expansion of coal extraction and processing facilities, to pay existing bank obligations and to finance working capital requirements.
Sultan vice-chairman Rufino Bomasang said the IPO comes at a time when there is strong demand for coal in both the domestic and global markets, raising interest in coal mining companies worldwide.
According to Sultan, share prices of coal companies overseas continue to outperform the global markets as the surging price of coal has outpaced crude oil and natural gas due to a spike in demand as global electricity demand grows.