Apollo Global Capital's FOO (finally?) approved by SEC

Apollo Global Capital [APL 0.13 11.76%], which is really just a backdoor shell for its subsidiary, JDVC Resources, disclosed that it has been issued a “pre-effective” letter from the SEC for APL’s planned follow-on offer (FOO). The pre-effective letter acts as a conditional approval to APL’s plan, subject to APL’s continued adherence to the SEC’s rules and to APL’s continued satisfaction of the remaining requirements and conditions.

APL plans to sell 12,350,000,000 common shares, at a price of between P0.07 and P0.08 per share, for a total equity raise of between P864m and P988m. APL originally applied for this FOO back in February, and at the time said that it would apply the proceeds towards purchasing a 49% stake in Poet Blue Ocean Pte Ltd, “from which APL outsources its mining vessel”, and to obtain some equipment needed to begin its offshore mining operations.

It is not immediately clear if APL’s intentions have changed with respect to the use of the proceeds from the raise. There are a lot of details to fill-in here, so we will wait to learn more (projected dates, updated prospectus) before we add this one to the calendar.

MB BOTTOM-LINE

It isn’t even really clear if APL has started operations yet. The linked disclosure from February makes it sound like the proceeds from the FOO were needed to purchase equipment to begin mining, so if the company has been unable to start until now because of this FOO delay, I’d have expected APL to have disclosed that or mentioned it.

There must be some other reason(s) for the delay. The country’s first off-shore mining company had so much momentum back in Q1’s high-volume basura season, but that has tailed off significantly since the February FOO announcement. At that time, APL was trading at P0.25/share. We don’t know the per-share price of the FOO, but I’d anticipate that it was originally much higher than the P0.07-0.08 that APL’s pitching now that their shares are trading in the P0.13/share range. 

--

Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.