Higher nickel prices and increased demand due to a ban on shipments of ore from Indonesia are expected to lead to a number of IPOs on the Philippines Stock Exchange this year by nickel producers aiming to take advantage of the favourable conditions by expanding existing operations and possibly starting new ones.
The first looks set to be the country’s number three nickel producer Global Ferronickel Holdings Inc. The company is hoping to raise as much as 26.98 billion pesos (US$600 million) in the process with pre-marketing expected to begin in early March. It will be the first local resources IPO since Coal Asia Holdings in 2012.
Global Ferronickel is believed to be in discussions to finalize cornerstone investors, which may include some of its leading customers, including trading companies and end-users in China. UBS is the international bookrunner and lead manager of the IPO, while among the banks believed to be involved in the issue are Maybank, Religare and SB Capital and Investment Corp.
Global Ferronickel was formerly called Southeast Asia Cement, a dormant holding firm taken over by Platinum Group Metals last year.
TVI Resource Development Phils Inc, a nickel miner partly owned by Canada’s TVI Pacific and operator of the Agata DSO project, has already stated that it plans to list locally this year while shares in Nickel Asia Corp have tripled over the past year as the Philippines emerged as the biggest ore supplier to China’s producers of nickel pig iron, used to make stainless steel, after Indonesia halted ore exports last January.
Philippine exports of nickel ores and concentrates to China in January to November 2014 rose 20% to 34 million tonnes, accounting for 75% of China’s total imports of nickel for the period.