Gotianun, a scion of the billionaire Consunji family, purchased 404,600 SCC shares at P25.90 to P26.65 per share. The combined purchases were valued at about P10.7 million.
The shares were acquired on Feb. 23, days after company managers led by tycoon Isidro Consunji told analysts they were confident in securing the coal mining contract in Semirara Island if it’s opened up for bidding.
SCC shares slipped 0.19 percent to P26.55 per share on Tuesday.
Technical barriers to entry
Nicky Franco, Abacus Securities head of research, told InsiderPH it was unlikely rival bidders would step in.
He also pointed to the unique risks of operating Semirara’s coal mine, which sits below sea level and requires constant engineering controls to keep seawater out.
“Nobody has the technical and institutional expertise that they have, specifically in relation to the issue of water seepage into the mine which is below sea level,” he explained.
“I don’t think anyone else would want to take on the risk that the sea wall barrier would get breached under their watch. Ecologic and economic nightmare,” he said.
Contract upside and valuation
SCC, the largest coal producer in the Philippines, might also end up getting a more advantageous outcome.
“Instead of the 13-year extension it had sought, the company could secure a full 25-year contract. Current coal reserves would not last that long, of course, but additional reserves could still be discovered,” Franco said.
After the purchases on Monday, Gotianun’s SCC stake increased to 27.43 million direct and indirect shares, valued at P728.14 million.
The stock has rebounded from its recent lows but is still 19.5 percent below where it traded before the contract risks surfaced last week. Parent firm DMCI Holdings fell 1.53 percent to P9.65, also roughly 10.5 percent below its level prior to the issue.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
