Coal Asia eyes expansion in Mindanao
Publicly listed Coal Asia Holdings Inc. is looking at expansion opportunities in Mindanao amid the explosion of demand to meet the region’s energy needs.
Coal Asia, which is one of the few major coal players in the area, said it was now in talks with the Department of Energy and other power companies that were planning to expand operations in the southern part of the country for long-term supply agreements.
“Positive talks with large power producers have been initiated and talks of a mine-mouth power plant set-up have been mentioned,” the company said in a statement.
To add to its commitment to the energy sector, Coal Asia’s affiliate, Colossal Petroleum Corp., signed a memorandum of agreement to buy into VenturOil, which owns Service Contract (SC) No. 6. The said contract covers offshore oil and gas exploration rights to Northwest Palawan encompassing the Cadlao and Bonita oil fields.
Amid expansion plans, Coal Asia said a recent assessment by independent investment bank Multinational Investment Bancorporation (MIB) showed that the company “was still significantly undervalued, based on its current share price.”
In compliance with PSE requirements related to the IPO, Coal Asia has decided to engage an accredited third-party company to re-evaluate and revalue the coal resources of its subsidiary, Titan Mining and Energy Company (TMEC).
A previous valuation was done in May 2012 by Multinational Investment Bancorporation (MIB) which, based on data from March 2012, had valued the coal reserves at 123 million metric tons (MMT) amounting to P12.5 billion.
Data as of June and July of this year indicated that results of the previous valuation based on the existing coal operating contracts (COC) in Davao Oriental and in Zamboanga-Sibugay might still be undervalued because of the current coal prices and the estimated yield from the said COCs.
Market capitalization was at P4.24 billion as of the last trading day.
“Based on the results of the revaluation, the corporation should conduct a study on options to enhance stockholders benefits. The enhancement in the corporation’s assets will allow it to have retained earnings, and will result in a possible buy-back program depending on the surplus situation,” Coal Asia said.—Paolo G. Montecillo