Nickel Asia Corp. (NAC), one of the country’s largest mining firms, has signed a share purchase agreement (SPA) with Japanese giant Sumitomo Metal Mining Co. Ltd. (SMM) for the sale of its entire stake in Coral Bay Nickel Corp. (CBNC). NAC disclosed the transaction to the Philippine Stock Exchange today, detailing the sale of shares representing 15.625 percent of CBNC’s total outstanding capital stock.
The deal, which reflects NAC’s strategic shift, was priced based on the carrying amount of CBNC’s shares in NAC’s financial records as of 30 September 2024. However, the exact financial terms of the deal were not disclosed.
The decision to divest from CBNC comes amid ongoing challenges in the nickel market, particularly the impact of rising operating costs and the weakening London Metal Exchange (LME) prices on CBNC’s financial performance. According to NAC vice president for treasury and investor relations, Andre Dy, the company aims to refocus its efforts on its core upstream mining operations and its growing renewable energy (RE) ventures, including solar and geothermal projects under its subsidiary, Emerging Power Inc.
“NAC is confident that this move will better position the company for sustained growth and diversification, allowing it to strengthen its focus on key areas that align with long-term strategic goals,” Dy said.
NAC operates six mines across the Philippines and is exploring new opportunities in the renewable energy sector, reflecting its commitment to diversify its portfolio and reduce dependency on traditional mining operations. The divestment from CBNC is seen as a pivotal step in this transformation.
This move underscores the increasing importance of strategic restructuring in the face of market volatility, and highlights NAC’s dedication to adapting its business model to better navigate shifting industry dynamics.
