The Securities and Exchange Commission has approved a plan by nickel mining firm Global Ferronickel Holdings Inc. to raise as much as P2.02 billion from a follow-on offering of shares.
Global Ferronickel, which trades on the Philippine Stock Exchange under the ticker FNI, was authorized to sell up to 250 million in primary common shares at P8.10 per share.
Of the proceeds, Global Ferronickel plans to infuse P490 million into its 99.89-percent owned subsidiary Platinum Group Metals Corp. (PGMC) as partial payment of the company’s loan to PGMC, which in turn will use the amount to settle part of its outstanding loan from the Taiwan Cooperative Bank (TCB).
In 2016, TCB extended a $20-million loan to PGMC to be used as working capital for its operations in CAGA Mines. The loan, which carries an interest rate of 3.75 percent plus LIBOR (London Interbank Offered Rate) per annum, is due this May 2017.
In the event that the entire amount is not raised, PGMC will service the loan using internally generated funds.
The remaining proceeds of P1.46 billion will be used by the company for working capital or additional capital for operations.
PGMC is the second largest nickel ore producer in the Philippines by volume of nickel shipment. It has one of the largest single mine laterite exporters. It is one of the largest global suppliers of nickel ore, accounting for 11 percent of the country’s nickel ore production in 2015.
Recently, Global Ferronickel disclosed that PGMC was no longer on the list of mining firms whose mines were recommended by the Department of Environment and Natural Resources (DENR) for either “suspension” or “closure,” citing an updated list. Four other companies are for suspension while 22 companies are up for closure, based on the updated list issued by the DENR-Office of the Undersecretary for Legal Affairs.