Nickel miner Global Ferronickel Holdings Inc. plans to get cornerstone investors for its planned P21.8-billion initial public offering in the first half of the year, according to one of the company’s underwriters.
“The transaction is very much going to happen. We would like to get it done in the first half of the year. But it is going to be a function of getting regulatory approval and market conditions,” Religare Capital Markets (International) chief executive Sutha Kandiah said in an interview.
Kandiah said Global Ferronickel was getting a lot of global attention because of the huge size of the follow-on offering and that a number of foreign investors were talking to the company to become cornerstone investors, or investors which will hold shares in bulk for a certain period.
Actual size of the offer shares to be sold to cornerstone investors is still being finalized.
Net proceeds from the share sale will be used to finance the company’s capital expenditures for business expansion through explorations and acquisitions.
The company said earlier it planned to spend $50 million to acquire a 100-percent interest in Southeast Palawan, which owns a 90-percent stake in Ipilan Nickel Corp., a firm engaged in nickel mining in Brooke’s Point, Palawan.
Kandiah said there was a window for GFNI to conduct its share offering over the next six to twelve months because of supply-demand situation as far as nickel was concerned.
He said aside from the Indonesian government’s ban on exports of unprocessed ore, there was also an increasing demand for the mineral, which was creating a supply shortage in the global market.
Indonesia is the world’s largest producer of mined nickel ore.
GFNI, the Philippines’ third largest nickel miner, is expected to benefit from the current developments. It operates open pit deposit sites known as Caga 2 and Caga 4 within the Cagdianao mine.
Meanwhile, Platinum Group Metals Corp., a subsidiary of GFNI, said it started the first two shipments of nickel ore early this month.
GFNI said PGMC expected to complete the loading of 10 more vessels for the month of April.
It said shipside-loading operations were ongoing for six vessels, all headed for China, with an average capacity of 55,000 wet metric tons of nickel ore per vessel.