The Sy family has gained control over Atlas Consolidated Mining and Development Corp. from the Ramos family after raising its stake to 54.48 percent through the acquisition of a 20.43-percent interest by Dominion Holdings Inc. (DHI) from Anglo Philippine Holdings Corp. (APO).

In a disclosure to the Philippine Stock Exchange (PSE) on Monday, Aug. 10, DHI said it has signed a deed of assignment for the acquisition of subscription rights to 727.2 million Atlas shares from APO for ₱857 million in cash.

In 2017, APO paid 25 percent of the subscription price for these, amounting to ₱797.05 million. DHI will now assume payment of the 75-percent balance amounting to ₱2.39 billion to Atlas upon the call of Atlas’ board of directors.

Prior to the acquisition, the Ramos family was the biggest shareholder of Atlas, with a 42.14-percent stake held through Alakor Corp., APO, National Bookstore, and family directors. APO directly owned about 27.14 percent.

The Sy family’s SM Investments Corp. (SMIC) owns 34.05 percent of Atlas, of which 17.06 percent is held directly, while 16.99 percent is owned through brokerage accounts.

The acquisition marks DHI’s first investment in the mining industry after it was acquired by the Sy family’s Monte Sur Equity Holdings Inc. DHI intends to hold a broader portfolio of assets by primarily investing in mining corporations.

DHI, with the objective of achieving long-term growth and returns, has determined that investing in Atlas will bolster the company’s portfolio.

Atlas is primarily engaged in copper mining through Carmen Copper Corp., which operates Atlas’ copper mines in Toledo City, Cebu province, primarily producing and exporting copper metal in concentrate as well as the principal by-products of copper mining and processing: gold and silver.

It is also pursuing the development and commercial production of other marketable by-products such as pyrite, magnetite, and molybdenum.

APO said the proceeds from the sale of a portion of its Atlas stake will be used to retire some of its liabilities. Aside from this debt retirement, the proposed assignment of the corporation’s subscription rights in Atlas is expected to significantly strengthen APO’s financial position by substantially reducing its subscription liabilities.

As a result, the transaction is expected to significantly improve its current ratio, debt-to-equity ratio, and return on assets, both at the parent company and consolidated levels.

At the parent company level, the transaction is likewise expected to increase retained earnings before tax through the recognition of the resulting gain on the assignment.

At the consolidated level, retained earnings are expected to decrease due to the reversal of the group’s previously recognized equity share in the net income and other comprehensive income of Atlas in prior years.

Notwithstanding such reversal, consolidated retained earnings will likely remain positive after giving effect to the transaction.

Earlier this year, Sy-led BDO Unibank Inc. sold 1.51 billion shares, or 70 percent of DHI, to Monte Sur at ₱1.68 per share. While Monte Sur launched a mandatory tender offer for the remaining shares, public participation was minimal as the stock price climbed on speculation that the Tampakan copper and gold project would be folded into the company.

Tampakan, located in Mindanao, is considered the largest undeveloped copper and gold deposit in Southeast Asia. The Sy family holds a controlling interest in the project, while the Alcantara and Consunji families maintain minority stakes.

The Consunji family’s DFC Holdings Inc. owns 8.87 percent of DHI, and Isidro A. Consunji is the chairman of DHI, while SMIC President Frederic C. DyBuncio is the chairman of Atlas. - James A. Loyola