Coal Asia: Details of Initial Public Offering (IPO)

Coal Asia Holdings, Inc., parent company of the firm with the country’s second-largest coal reserves, is planning to raise up to P800 million through an initial public offering (IPO) before the end of the year.

The company will sell 800 million common shares — representing 20% of its total issued and outstanding stock — at an offer price of P1.00, also the share’s par value.

Coal Asia IPO Details

According to the company, proceeds of the IPO will be used for: (a) further exploration work for both the Davao Oriental and Zamboanga-Sibugay Projects; (b) mine development of the Davao Oriental Project; and (c) working capital purposes.

Coal Asia will use the stock code “COAL” upon its listing and trading on the Philippine Stock Exchange (PSE) starting October 23.

The IPO offer period is from October 9 to 15. Abacus Capital and Investment Corporation has been designated as the lead underwriter of the offering.

COAL’s IPO is the fourth, and expected to be the last, for 2012. Early this year, GT Capital (GTCAP), East West Bank (EW), and Calata Corporation (CAL) had their IPOs and commenced public trading on the PSE.

Company Background

Coal Asia incorporated only a few months ago, in June 2012, to become a holding company engaged in the business of investing in coal and energy related businesses. The company plans to become a crucial source of fuel for coal projects in the country expected to generate power.

It is the parent company and 100% owner of Titan Mining and Energy Corporation (TMEC), a company incorporated in November 2008 which owns coal operating contracts in Davao Oriental and Zamboanga-Sibugay.

In the Davao project alone, “proved and probable” coal reserves are estimated to reach 7 million metric tons (MMT), with an estimated market value of P24 billion. The company’s total coal resource is said to be 12.7 MMT based on drilling of mini-basins in Barangay Old Macopa and Bactinan in Davao Oriental.

For the Zamboanga-Sibugay project, the total coal resource is expected to reach 3.5 MMT. The combined total potential deposit is 51.1 MMT.

Coal Asia’s total coal assets is said to be P12.5 billion, based on a valuation made by Multinational Investment Bancorporation.

Coal Asia Financial Information

In 2011, the company booked a net income of P4.9 million on revenues of P21.8 million. As of the first 6 months alone in 2012, Coal Asia already earned P13.4 million with net income of P2.03 million.

Coal Asia is primarily owned by the following owners with 20% equity ownership each:

  • Dexter Y. Tiu (Filipino)
  • Jaime T. Ang (Filipino)
  • Alexander Y. Tiu (Filipino)
  • Gertim G. Chuahiong (Filipino)
  • Eric Y. Roxas (Filipino)

Their shares will be diluted to 16% once shares, representing 20% of their total stock, are issued to the public.

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