Nickel Asia sells equity in Coral Bay to Sumitomo Metal

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Listed miner Nickel Asia Corp. has sold its entire shareholdings in Coral Bay Nickel Corp. to Sumitomo Metal Mining Co. Ltd.

In a disclosure to the Philippine Stock Exchange on Monday, Nickel Asia said it has jointly signed a share purchase agreement with Sumitomo Metal concerning its equity holdings equivalent to 15.625 percent of the total outstanding and issued capital stock of Coral Bay, which operates an ore processing facility in Palawan.

The share sale took effect on February 3. The purchase price was based on the carrying amount of Coral Bay’s shares in Nickel Asia’s financial statement as of September 30, 2024. 

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Prior to this development, Nickel Asia last month said it will hire a third party appraiser to conduct a valuation of the Coral Bay shares it intends to unload.

Nickel Asia incurred a 30 percent fall in net income for the first nine months of 2024 attributable to equity holders of the parent company at P2.55 billion, compared with P3.65 billion in the corresponding period in 2023. 

The company also bore the brunt of a 12 percent revenue decline at P16.98 billion from P19.29 billion during the comparable period.

Last month, Andre Dy, Nickel Asia vice president for treasury and investor relations, said the share sale was driven by volatility in the nickel market, as well as the company’s decision to focus on its upstream mining and renewable energy businesses.

“Over the last three years, the financial performance of (Coral Bay) was negatively impacted by increasing operating costs and weakening LME (London Metal Exchange) price. The divestment is (expected) also to positively impact the (Nickel Asia) Group in furthering its ambitious growth and diversification objectives,” Dy said in a recent statement when Nickel Asia first announced its plan.

The nickel miner currently has six operating and two exploratory mines.

The company also has exposures in renewable energy through its subsidiary, Emerging Power Inc. which is exploring solar and geothermal power projects.

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