SMIC ups stake in Atlas to 28.43%

MANILA, Philippines - SM Investments Corp. (SMIC), the investment holding firm of retail tycoon Henry Sy, is beefing up its stake in Atlas Consolidated Mining & Development Corp. to more than a quarter of the listed copper producer.

In a disclosure to the Philippine Stock Exchange, SMIC said it purchased from BDO Unibank the P5.3418-billion convertible loan covered by the July 25, 2011 secured notes facility agreement between Atlas and the bank.

SMIC said it has advised Atlas of its intention to fully exercise the conversion option under the agreement as the assignee of BDO.

The conversion of the loan into equity of Atlas will involve the issuance to SMIC of a total of 273.1 million Atlas common shares. This will bring SMIC’s total shareholdings in Atlas to 28.43 percent of the resulting outstanding capital stock from only 17.9 percent.

SMIC’s decision to increase its equity investment in Atlas affirms its optimism in Atlas’s potential for growth as a key player in the mining industry.

Just last month, Atlas announced that its wholly-owned subsidiary Carmen Copper Corp. (CCC), which operates the Toledo copper mine in Cebu, produced a record 7.35 million pounds of copper in March 2012 and increased its production rate during the first quarter of this year by 21 percent relative to the output for the same period in 2011.

CCC, following its successful $300-million bond issue, is already gearing towards the expansion of its operations by enhancing production efficiency and by developing the commercial value of its copper processing by-products.   It is targeting a 50 percent rise in mill throughput from the current average rate of 40,000 tons per day to 60,000 tons per day by 2014. 

It is likewise projecting to sell this year a total of 80 million pounds of copper metal, which is 12 million pounds more than what was sold in 2011.

Atlas is also actively pursuing its exploration projects and is looking into acquisition opportunities.

SMIC is a dominant player in retailing, banking and shopping mall development. It is also a fast-growing player in residential and tourism-oriented real estate.