Marcventures to issue P100-million convertible bonds

MANILA, Philippines - Marcventures Holdings Inc. (formerly Ajo.net Holdings) has announced the issuance of a P100-million convertible loan with a one-year maturity.

In a disclosure to the Philippine Stock Exchange, Marcventures said the loan carries an interest of 12 percent, payable on maturity or upon exercise of the conversion option.

Marcventures said the lender shall have the option to convert all or a portion of the loan into fully paid shares of the company at any time prior to the loan’s maturity. The conversion price shall be at 2.2 centavos per share, equivalent to eight times Marcventures’ projected earnings per share for 2011.

Upon conversion of the loan, the lender shall be entitled to a warrant to subscribe to one share for every four converted shares. The warrants are subject to a two-year exercise period.

Marcventures said the company has the option to prepay all or portion of the loan at any time inclusive of any interest due at the time of prepayment.

Loan proceeds will be used to further develop the company’s nickel mining property and for operating expenses.

Marcventures is aiming to produce 600,000 metric tons of nickel ore in the first year of operations. The figure is expected to increase to 800,000 MT and 1.2 million MT in the second and third years, respectively.

Informed sources said Marcventures is currently in talks with both foreign and local investors and to date has placed about one-third of its convertible loans.

Marcventures is raising its capitalization to as much as P5 billion from P2 billion. It is also increasing the par value of its shares from P0.01 to P1 per share.

Its parent firm, Marcventures Mining and Development Corp. (MMDC) recently obtained incentives from the Board of Investments (BOI) for a P474-million investment in a mining project in Surigao del Sur.

MMDC has a mineral production sharing agreement to mine 4,799 hectares of land in Cantilan, Surigao del Sur for nickel and gold.

MMDC, a company led by former Lepanto Consolidated Mining president Ramon Recto, has taken over Ajo.net in April in a share swap deal valued at P1.3 billion.