Thursday, 26 November 2009

UK fund to invest in Century Peak

Miguel R. Camus
Business Mirror

A FEW weeks after it listed by way of introduction, Century Peak Metals Holdings Corp. has found an investor for its proposed smelting plant in Leyte.

UK-based GEM Global Yield Fund Ltd. is planning to invest up to P2.9 billion in the listed company to fund the miner’s multibillion-peso nickel pig iron smelting facility.

In a filing to the Philippine Stock Exchange (PSE) on Wednesday, Century Peak said GEM has committed to subscribe to P2 billion worth of shares of the company. In addition, the miner is issuing a warrant to the emerging markets investor granting it a three-year option to subscribe up to 150 million of its shares, worth another P900 million.

This prices the shares at P6 apiece, or at a 10-percent discount based on Century Peak’s closing price of P6.7 per share yesterday. Shares of the miner rose 4 percent following the announcement.

“GEM Global Yield Fund is a welcome addition as an institutional investor into the company, given their global expertise, and proven reputation in capital markets and structured transactions worldwide,” said Century Peak president Wifredo Keng, in a statement.

The miner said funding will be used mainly to complete the Century Hua Guang Smelting Project, a nickel-chromite plant being built through a joint venture with owners of Zheijiang Hua Guang, a top nickel pig iron producer in China.

Century Peak earlier said the smelting plant will cost P7 billion, with the initial phase needing P2 billion. Keng said the company is targeting to produce 5,000 tons to 10,000 tons of pure nickel per year after the first phase of the smelting facility comes online.

Peak operation will double nickel production to about 20,000 tons per year.

At present, the company’s nickel mining subsidiary Century Peak Corp. holds a mineral production sharing agreement covering a 4,000-hectare property in the Dinagat Islands and Albor, Dinagat province in Surigao del Norte.

The miner also remains optimistic in its operations, with nickel imports to China hitting a record high in recent months. Century Peak shipped 52,873 metric tons of nickel to China in October.

Established in 1991, GEM is a $3.4-billion investment group having completed 275 transactions in 55 countries. It is an alternative investment group that manages a diverse set of assets across the world.

Last month, GEM also announced a P1.1-billion investment deal with another PSE-listed firm, AgriNurture Inc.

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