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Stock Commentary

Philex Mining shares to list after underwhelming SRO

Merkado Barkada
Philex Mining shares to list after underwhelming SRO

Philex Mining [PX 3.25] [link] disclosed the underwhelming results of its stock rights offering (SRO) ahead of the listing of the new shares on August 3.

Of the 842 million SRO shares that were available for  sale, PX only sold 367 million shares in the first round of the SRO.

PX sold an additional 278 million shares in the second round of the SRO (to people who also fully exercised their SRO rights in the first round and wanted a little more).

Over 196 million shares needed to be scooped up by the contractual underwriter’s “take-up”, which saw the underwriter and “other related parties” step in to buy all of the shares that existing shareholders didn’t want.

The shares will list on Wednesday morning.

There is no restriction/lock-up period, so any shareholders that availed of the SRO will be able to sell those shares as soon as they list tomorrow.  


MB BOTTOM-LINE

With only 43% of shares taking part in the SRO, it looks like there wasn’t much appetite from existing shareholders to commit more money to Manny V. Pangilinan’s resource exploration company.

The P3.15/share SRO price (18% discount) was pretty attractive relative to PX’s market price of P3.85/share back on June 22 when the transaction details were announced, but the stock price has fallen steadily since then to the P3.25/share level as of yesterday’s close, shrinking that discount to just 3% off the market price.

It’s not like this was a massive SRO either, as the number of shares for sale represents just 12% of PX’s post-SRO outstanding shares.

Zooming out a bit, PX has had a roller-coaster of a year so far, climbing 23% from January 1 to its 2022 peak of P6.57/share on March 8, then falling 50% over the next four months to where we are today. I’ll be watching to see if the any SRO buyers look to sell quickly to scalp the discount. 

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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.

PHILEX MINING CORP

PHILIPPINE STOCK EXCHANGE

SRO

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