DOMINION Holdings Inc. (DHI) is seeking to increase its authorized capital stock nearly ninefold to P30 billion from P3.42 billion as it moves to consolidate the companies that have control over the Tampakan copper-gold project in Mindanao under a single entity, potentially making Dominion one of the country’s largest mining firms.
In a disclosure on Thursday, the company said its board on Aug. 19 approved and endorsed for shareholder approval the proposed merger of Dominion Holdings with Indophil Resources Phils. Inc. and Sonar Holdings Inc., with Dominion as the surviving entity.
Indophil and Sonar together hold 100 percent of the voting rights in Sagittarius Mines Inc. (SMI), which holds the financial and technical assistance agreement covering the Tampakan Copper-Gold Project in South Cotabato, Mindanao.
Post-merger, Dominion will hold 100 percent of the voting rights and will acquire controlling ownership in SMI, it said.
“The Board views the merger as a strategic transaction with potential for generating long-term growth and returns for DHI,” Dominion said.
Juan Paolo Colet, managing director of China Bank Capital Corp., said the transaction could significantly transform Dominion’s position in the Philippine mining industry given the potential scale of the Tampakan project.
“This deal could potentially transform DHI into the largest mining company in the Philippines,” Colet said.
“By some estimates, the Tampakan copper and gold reserves have a gross value of around $150 to $200 billion,” he added, saying successful development of the project could generate significant returns for Dominion shareholders, strengthen the country’s resource sector and contribute to national economic growth.
The company said the merger would result in the assets, rights, and liabilities of Indophil and Sonar accruing to and being owned by Dominion, in exchange for which common shares of Dominion will be issued to the shareholders of Indophil and Sonar.
Management was authorized to determine, fix and finalize the exchange ratio in consultation with an independent fairness valuator, which will determine the appropriate values of Dominion and the absorbed companies.
“DHI believes that the merger will be value-accretive to its shareholders,” the company said.
The proposed merger will be presented for approval at Dominion’s upcoming annual stockholders’ meeting. It is also subject to approval of the stockholders of the constituent corporations along with the relevant regulatory permits.
Separately, Dominion’s board approved and endorsed for shareholder approval the proposed increase in its authorized capital stock to P30 billion from P3.42 billion.
Under the proposal, the authorized capital will consist of 29.75 billion common shares with a par value of P1 each and 2.5 million preferred shares with a par value of P100 each, from the current authorized capital of 3.4 billion common shares and 200,000 preferred shares.
The company said the move was intended to support its future capital-raising efforts and expansion programs.
Dominion shares last closed at P15.60 each on Wednesday.
