First Pacific eyes $282 million from stock rights offer

MANILA, Philippines - First Pacific Co. Ltd. of Hong Kong, the parent company of Metro Pacific Investments Corp. (MPIC), is undertaking a stock rights offering to raise at least $282 million to fund investments in Southeast Asia, particularly in the Philippine mining and infrastructure sector.

In a statement posted on the company’s website, First Pacific chief executive officer and managing director Manuel Pangilinan said: “We intend to apply the net proceeds in pursuit of First Pacific Group’s investment strategies in mining in the Philippines and in Southeast Asia and, if suitable opportunities arise, in infrastructure assets in the Philippines.”

First Pacific owns around 21 percent of Philex Mining Corp., the biggest gold and copper producer in the Philippines. Income contribution of Philex to First Pacific amounted to $2.1 million in the first half of the year.

“With respect to further investments, First Pacific continues to review mining opportunities given that there are significant mining reserves and a more favorable regulatory environment in the Philippines,” Pangilinan said.

First Pacific has been building up its investment portfolio in the Philippines through acquisitions as part of a strategy to enhance shareholder value and secure new investment opportunities in sectors that offer long-term value appreciation. About 80 percent of its assets are invested in the Philippines, which include a majority stake in infrastructure and services firm MPIC and Philippine Long Distance Telephone Co. (PLDT).

Earlier reports said First Pacific was aiming to raise its shareholdings in Philex to a minimum 51 percent.

First Pacific is offering 20 percent of its existing share capital to shareholders at a ratio of one share for every five shares held. The offering involves 643 million to 672 million rights shares priced at HK$3.40 apiece or a 36 percent discount to First Pacific shares’ closing price of HK$5.30 prior to its last trading day on Oct. 13.

Anthoni Salim, First Pacific chairman and controlling shareholder with his 44.2 percent stake, is subscribing to all the rights shares entitled to him.

Pangilinan said the rights offering will “strengthen our capital structure and provide us with substantial financial resources to grow the group’s businesses without diluting the existing shareholders’ interest in the company.”

Listed in Hong Kong, First Pacific’s shares are also available in the United States through American Depositary Receipts (ADRs).