Friday, November 21, 2008 [ manilatimes.net ]
WELLEX Industries Inc. (WIN) said it is looking at disposing some of its assets to raise cash and fund its venture into mining and oil exploration.
On the sidelines of a stockholders’ meeting on Thursday, Weslie T. Gatchalian, WIN president and chief executive, told reporters the company may sell “mainly equipment that are dilapidated already…to gain more liquidity, especially next year.”
At present, only 24 of the 40 warehouses of Plastic City Industrial Corp. (PCIC), a WIN subsidiary, is rented out to other parties. After selling the equipment in the remaining vacant warehouses, the company can then lease these to shore up more revenues.
WIN, however, is not keen on selling its real properties, which are the company’s biggest asset, Gatchalian said.
WIN, the listed company of the Wellex Group Inc., was originally into mining and oil exploration before shifting to plastics and food manufacturing in the 1980s. It had since closed down the manufacturing and commercial operations of its subsidiaries and just leased out its warehouse facilities. Previously the company said it was looking for strategic partners to help operate the PCIC plant.
Gatchalian said WIN will use internally generated funds for future exploration and mining development of chromite ores but at the moment it has yet to secure properties in Surigao del Norte, Surigao del Sur and Dinagat island with mine potential. The company is in talks with landowners and may close a purchase deal by first quarter of next year.
The group may also join the list of bidders for properties that the Department of Environment and Natural Resources is auctioning.
“We’re assessing the costs of doing the exploration and mining development. From there we will then asses where we’ll get the funds or what options we have,” he said. WIN is also considering tying up with Chinese investors, most of which are ore processors and steel makers, for a possible joint venture.
Earlier, Wellex Mining announced that it is developing 3,700 hectares of property in Dinagat for chromite mining. It is in talks with Chinese firms, which were identified by the company as end-users of the mineral ores, for the possibility of jointly developing the mine.
Of the total land area it owns, Wellex Mining has blocked 350 hectares of chromatic area with a tonnage of 250,000 dry metric tons of chromite ore averaging 50 percent. Wellex Mining is also concentrating on chromite exploration within the 2,400 hectare site devoted to it while the firm delayed the development of its 1,200 hectare nickel site due to the slumping prices of the ore in the world market. The firm said the area is covered by a mineral production sharing agreement with the government that allows large-scale mining.
“It may seem that it has competing interests but the mining is very big for everybody to compete,” Gatchalian said. Wellex Mining and WIN—which will also be pursuing oil exploration—are two different entities with different operations and resources, he added.-- Likha Cuevas-Miel
