Coal Asia to hold P800M IPO

Coal Asia Holdings, holder of the country’s second-largest coal reserves, is planning to debut on the Philippine Stock Exchange with an initial public offering worth P800 million before the end of the year.

Coal Asia plans to offer 800 million primary common shares, equivalent to 20 percent of its total shares, to the public at P1 per share.

Local investment house Abacus Capital Investment Corp. was mandated to arrange the IPO.

Coal Asia is the parent company of Titan Mining and Energy Corp. (TMEC), which owns mining exploration and development rights in Davao Oriental and Zamboanga Sibugay.

The coal mining firm filed on Monday its listing application in the Securities and Exchange Commission, signifying its intent to conduct its IPO in the fourth quarter of 2012.

In a statement, the company said it was planning to list its shares on the first or main board of the Philippine Stock Exchange.

In selling its growth story to the public, the company is banking on the continued rise in demand for thermal coal fuel both in the domestic and international power generating sector. The company is seen to have the potential to become the biggest producer of high-grade bituminous coal in the country.

Company sources said mine developments were on track to meeting the scheduled start of commercial production in 2014. The mine is seen producing 600,000 metric tons of high-grade coal yearly.

A June 2012 preliminary feasibility study covering 214 hectare out of its 7,000-hectare mining site in Davao Oriental (COC# 159) from Old Macopa to Batinan showed an observable coal reserves yield factor of 28,000 tons per hectare, which would translate to a market value of P23.8 billion.

An earlier Philippine Mineral Reporting Code standard geological report on COC# 159, 166 and 167 in Davao Oriental and Zamboanga Sibugay, done in April this year, identified potential coal resources of 120 million metric tons.

An independent valuation report prepared by Multinational Investment Bancorporation dated May 2012 valued Titan’s coal assets at P12.5 billion.

Coal Asia has already inked off-take contracts both here and abroad but is looking to export to new markets such as India, Japan, Taiwan, Hong Kong and Vietnam.