PSE halts Dominion trading amid Tampakan backdoor listing

The mammoth Tampakan copper-gold project is moving closer to becoming part of a publicly listed company after the Philippine Stock Exchange (PSE) formally classified its planned merger with Dominion Holdings Inc. as a backdoor listing.

The PSE said on Wednesday Dominion’s planned merger with Indophil Resources Phils. Inc. and Sonar Holdings Inc. falls under its revised rules on backdoor listing. This is primarily because the transaction would result in a “substantial change” in the business of the Sy- and Consunji-backed Dominion.

Once the proposed merger has been completed, Dominion will survive as the listed entity.

Avenue for unlisted firms

Backdoor listing is when a listed company, directly or indirectly, acquires the shares of assets of an unlisted company or person or group of persons, or vice versa. This process allows an unlisted firm to become publicly listed without going through the initial public offering process.

It can also happen when there is a significant change in control, composition of the board and business.

In this case, Indophil and Sonar together hold 100 percent of the voting rights in Sagittarius Mines Inc. The latter holds the financial and technical assistance agreement that covers the Tampakan copper-gold project in South Cotabato.

Southeast Asia’s biggest

Tampakan is touted as the largest underdeveloped copper-gold mining project in Southeast Asia.

After determining that the transaction is tantamount to backdoor listing, the PSE suspended trading of Dominion shares on Wednesday morning pending the company’s compliance with requirements under the revised backdoor listing rules. It did not provide a timetable for when trading will resume.

Recently, Dominion has been repositioning itself as an investment holding company focused primarily on mining.

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The company earlier acquired subscription rights equivalent to a 20.43-percent stake in listed Atlas Consolidated Mining and Development Corp. It is also considering acquiring SM Investments Corp.’s roughly 34-percent stake in Atlas.

Also to support the Tampakan merger and future expansion, Dominion is seeking to raise its authorized capital stock nearly ninefold to P30 billion from P3.42 billion.

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