Lepanto Consolidated [LC 0.15 0.68%] [link], the mining company owned by Felipe Yap, approved a plan to raise P2.02 billion through a stock rights offering (SRO) priced at P0.14/share, with an entitlement ratio of 1 SRO share for every 4.6 existing LC shares owned.
LC said that it would use the proceeds to “fund exploration drilling for gold and copper deposits”, settle payables, and for working capital.
No dates were available yet, as LC still needs to apply to the SEC, obtain SEC approval, and then obtain PSE approval for the listing before we can have any confidence in a potential set of SRO dates.
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The company has had a terrible run of profitability, losing over P4.2 billion from 2016 to 2020. While we don’t have the full FY21 earnings report for LC, it had lost nearly P300 million in the first 9 months of 2021, so it was looking like yet another year of losses for the company.
Yes, the stock is up about 100% from its COVID-crash low of P0.07/share, but it’s down 20% from its 5-year highs back in 2017.
The company currently has 39,822,869,196 outstanding shares, so this proposed SRO will increase LC’s outstanding shares by over 36%.
The SRO itself isn’t priced all that attractively, as it is only at a 5% discount from LC’s Friday close of P0.148/share.
This process has a long way to go (it seems like they haven’t even taken the first official step to apply to the SEC yet), so it’s possible for a lot to happen to the pricing dynamic between market price and offer price in that time.
For now, I’ll add LC’s SRO to the IPO Tracker, and keep everyone up-to-date as details become available.
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