Int’l investment fund to infuse $33M in Atlas’ Carmen Copper

BY RUBY ANNE M. RUBIO, BusinessWorld Reporter A global investment fund with $15 billion in capital will infuse $33 million in Carmen Copper Corp. ahead of the mining company’s initial public offering (IPO) this year. "This equity infusion is designed to improve Carmen’s valuation during our IPO later this year as the project will be at an advanced stage once shares are offered to the public. We are delighted that this group appreciates the potential both within Atlas and in this sector in the Philippines in general," Atlas Consolidated Mining and Development Corp. President and Chairman Alfredo C. Ramos said in a disclosure. Carmen Copper is a wholly-owned unit of Atlas. Atlas also disclosed its board of directors had entered into a deal for Crescent to buy a portion of its outstanding debts for $7 million to be convertible into Atlas common stock at par value. The deal is subject to final due diligence work. The $7-million proceeds will be injected into Atlas as deposits for subscriptions for equity. The transaction was arranged by Singapore-based boutique investment bank Presidio Capital. Due diligence is expected to be completed in six weeks. Atlas shares on Wednesday jumped 11.46% to P6.80 from P6.10. Carmen will raise $151 million to fund its mine rehabilitation through debt via offtake agreements and equity via listing at the Philippine Stock Exchange. Carmen will also need to raise funds to reopen its Toledo mine in Cebu. The financing formula comprises 40% to 50% of the development costs as debt or copper offtake advances. The remainder will be raised by way of equity. The $33-million equity infusion could translate to around 34% of Carmen. The equity into Carmen will come in two tranches: a $5-million convertible bond up front and a $28-million subscription for new shares upon finalization of a senior debt instrument and offtake agreement for the copper project. The proceeds from the convertible bond will initially be used to dewater the underground mine in preparation for rehabilitation. Crescent is an investment program established to finance proprietary special situation and alternative investment opportunities in the Asia-Pacific region. The fund is seeking to deploy up to $500 million over two years. Larry Harding, Presidio Capital managing director, said, "Our investor group sees great potential in the mining and resources sector in the Philippines. The country is blessed with natural resources, and is now encouraging a more investor-friendly climate that will allow these resources to be properly developed to the great benefit of both the Philippines itself and a resource-hungry international community. Moreover, with Atlas we have a company with a long-standing tradition and a sponsor with the utmost integrity." At its peak production from 1979 to 1984, Atlas was the third largest copper producer in the world.