Sy starts mining consolidation via Dominion Holdings

MANILA, Philippines — Sy and Consunji-backed Dominion Holdings Inc. (DHI) is taking over a 20.43-percent stake in listed miner Atlas Consolidated Mining and Development Corp. from Anglo Philippine Holdings Corp. (APO).

Stock pundits expect this to jumpstart the consolidation of the mining interests of the Sy family into DHI. SM Investments Corp. still owns 34 percent of Atlas, but has indicated plans to unload this.

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The Sy and Consunji family also jointly control the Tampakan mine, touted as Southeast Asia’s largest underdeveloped copper-gold mining project.

In separate stock exchange disclosures, DHI and APO said they had signed a deed of assignment on Aug. 7 covering 727.2 million subscribed and partially paid common shares of Atlas.

The transaction transfers to DHI all of APO’s rights, interests and obligations over the shares, including payment of the remaining subscription payables.

“The acquisition marks the first investment of DHI into the mining industry,” the company said. “DHi intends to hold a broader portfolio of assets by primarily investing in mining corporations.”

APO had already paid 25 percent of the subscription price. Dominion said this amounted to about P797.05 million. The remaining 75 percent is payable to Atlas upon call of the mining company’s board.

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For APO, the transaction will allow the company to trim its debt and strengthen its balance sheet.

The company said proceeds from the assignment would be used to retire a portion of its liabilities.

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The deal is also expected to substantially reduce its subscription liabilities and improve its current ratio, debt-to-equity ratio and return on assets at both the parent and consolidated levels.

At the parent company level, APO expects the transaction to increase retained earnings before tax through the recognition of a gain from the assignment.

Its consolidated retained earnings, however, are expected to decline due to the reversal of the group’s previously recognized equity share in Atlas’ net income and other comprehensive income in prior years.

Despite this, APO expects consolidated retained earnings to remain positive after the transaction.

READ: Atlas Mining turns profitable on higher gold prices

The company cautioned that these financial effects remain subject to final accounting treatment under applicable Philippine Financial Reporting Standards.

Atlas, meanwhile, operates Carmen Copper Corp. in Toledo City, Cebu. It primarily produces and exports copper metal in concentrate, with gold and silver as principal by-products. INQ