Atlas will make Carmen Copper 100% subsidiary and plans to induct a new strategic investor after buying out its private equity partner, Casop.
Atlas Consolidated Mining and Development will shell out USD 368 million to make Carmen Copper a wholly owned subsidiary buying out the 45.54% owned by Casop, its private equity partner.
Atlas, which is based in Manila, also told the Philippine Stock Exchange on Friday that it will raise USD 390 million through a combination of debt and equity to finance the acquisition. BDO Capital and Investment and Evercore Partners are advising Atlas on the acquisition and the fundraising.
Atlas is an integrated resources company that has been in business since 1935. It is primarily engaged in copper and nickel mining but also earns revenue from water supply. The company’s Toledo copper mine started production in 1955 and was once the world’s third biggest copper producer. Atlas also has a nickel project in Palawan and a portfolio of mineral interests.
In 2005, it restructured its assets to transfer the copper mine into a new company, Carmen Copper and also created three other subsidiaries, Berong Nickel, Aquatlas and Atlas Exploration. Atlas Exploration is charged with developing the portfolio of copper, gold and nickel exploration projects. Atlas is owned and managed by the Ramos family.
In May 2006, Atlas raised USD 40 million from Crescent Asian Special Opportunities Portfolio, a Singapore-based special-situations fund by selling a 34% direct equity stake, convertibles and some debt on Carmen’s books. Casop subsequently exercised its right to convert and upped its stake to 45.54%. On the back of the capital infusion by Casop, Carmen raised USD 100 million debt facility from Deutsche Bank, guaranteed by Philippines Exim, enabling it to invest in new equipment and ramp up production. Atlas subsequently refinanced the Deutsche loan with a facility from local bank, Banco de Oro Unibank.
In response to the price movement, Atlas management suspended its shares from trading ahead of an official announcement that it was buying out Casop and raising new capital in Atlas at a price of Ps19.56 per share, representing an 8.5% premium over its 30 day average price.
Atlas did not disclose the source of the equity, saying in its stock exchange filing that it would be from a supportive investor whose substantial financial resources and market prominence will enhance Atlas’s ability to access capital markets. Atlas also said the two stage deal buying out Casop and raising capital would increase Ebitda by 84%.
(Sourced from www.financeasia.com)
