Atlas Consolidated Mining and Development Corp plans to raise up to P1.8 billion, primarily to increase its investment in its wholly-owned subsidiary, Carmen Copper Corporation. Principal shareholders of Atlas Mining will serve as lenders by extending the convertible loans through independent bilateral loan agreements.
The listed miner, which is owned by the Ramos family, said in a disclosure on June 5 that its Board of Directors authorized the company “to avail of senior unsecured convertible loan facilities covering the aggregated amount of up to P1.8 billion.”
“The proceeds of the Convertible Loans will be used substantially by Atlas Mining to subscribe to the capital stock of... Carmen Copper Corp,” the disclosure read.
Anglo Philippine Holdings Corp, another listed firm owned by the Ramos family, announced in a separate disclosure its participation in the facility arrangement.
The company said its Board of Directors authorized the management “to negotiate and finalize with Atlas Mining and/or its designated arranger for the participation of the company in the convertible loans up to an amount of P700 million.”
According to both disclosures, the convertible loans, which will have a three-year tenor, will accrue an annual interest rate of 4% payable semi-annually and will have an indicative yield-to-maturity of 5.625%
The loans will be convertible into shares of Atlas Mining at a price equivalent to 120% of the volume weighted average of the company’s shares over a period of 10 trading days or at par value of shares, whichever is higher. The company added that the funds may be paid prior to maturity at a price at which the agreed yield will be realized.
The lenders will have this option on the first anniversary of the drawdown date and after every six months. Atlas Mining may also exercise this at any time after 18 months from the drawdown date, as long as the closing price of the listed miner’s shares on each of 20 consecutive trading days exceeds the 130% conversion price.
“Closing is expected to take place in the next two weeks following completion of documentation,” Atlas Mining said.
Atlas Mining president Adrian Paulino S Ramos said this move would boost Carmen Copper’s financial position. “While we continue to work to maximize production at Carmen Copper, we remain constrained by a weak copper price environment.”
He added there was the need to further invest in the development of Carmen Copper’s open pit mine to achieve target output in the ensuing years. “Through the convertible loan facilities to be extended to Atlas Mining, we will be able to provide an immediate boost to the financial position of Carmen Copper.”
Carmen Copper has exclusive operating rites over mineral resources and ore reserves within the 1674 hectare Toledo Copper Mine Complex in Cebu.