MANILA, Dec 10 (PNA) — Philex Mining Corporation and Silangan Mindanao Exploration Company Inc (SMECI) have approved the issuance of Php 7.2 billion worth of convertible notes.
“The Board of Directors of Philex Mining Corp. and Silangan Mindanao Exploration Company, Inc., a wholly-owned subsidiary of Philex, approved the offer and issuance of Convertible Notes (CN) by SMECI (the Issuer) amounting to P7.2 billion,” the company said in a disclosure with the Philippine Stock Exchange (PSE) Wednesday.
The disclosure pointed out the notes bear a rate of 1.5 percent payable semi-annually every June 18 and December 18, with maturity rate of eight years.
The issuer also has an option for one-time redemption, during the first anniversary issuance of the note on Dec 18, 2015.
The CN’s proceeds will be used for its Silangan Project in Surigao del Norte, to fund the Definitive Feasibility Study and repay advances from Philex.
However, it stressed the evaluation of the Silangan Project, which was conducted by another party, prompted the issuance.
Moreover, Philex noted the issuer can exercise the redemption option at a premium rate of 3 percent per year, retroactive from issue date and compounded semi-annually.
“A premium, payable at a rate of 3% per annum, retroactive from issue date and compounded semi-annually, will apply if the Issuer exercises the redemption option,” it said.
From Dec 19, 2015 onwards, one piece of Php 18,000 convertible notes can be converted into one common share of SMECI.
On the other hand, Philex Mining Corp said a total of 400,000 new shares, about 40 percent of the expanded share capital of SMECI will be issued upon full conversion.
“Upon maturity, all CN outstanding will be redeemed at par, plus all accrued interest, including the 3% per annum premium on face value, compounded semi-annually from the date of issue (December 18, 2014),” it added.
The disclosure noted Philex Mining Corp will serve as the Solidary Co-Issuer for the offering.
SMECI is the holding company of Silangan Mindanao Mining Co., Inc. (SMMCI), the developer of the Silangan Project in Surigao del Norte. (PNA)