TVI's Owned TVIRD Files Preliminary Prospectus in Connection with a Proposed Initial Public Offering in the Philippines

CALGARY, ALBERTA – TVI Pacific Inc. (TSX:TVI) (OTCQB:TVIPF) announced today that TVI Resource Development (Phils.), Inc. (“TVIRD”), a company in which TVI has a 30.66% equity interest, has filed a preliminary prospectus with the Philippine Securities and Exchange Commission and the Philippine Stock Exchange, Inc. relating to a proposed Initial Public Offering of TVIRD shares in the Philippines.
As quoted from the press release

Highlights

• The Preliminary Prospectus contemplates a primary offer of up to 272.02 million shares from the unissued capital stock of TVIRD (representing 10% of TVIRD’s projected outstanding common share capital) and a secondary offer of up to 136.01 million shares from the holdings of existing shareholders (representing 5% of TVIRD’s projected outstanding common share capital), in each case at an offer price of up to PHP 3.71 per share (approx. CAD$0.11 per share using a PHP/CAD exchange rate of 35.28). TVIRD also intends to file with the SEC for approval the amendments to its Articles of Incorporation consisting of, among other matters, the reclassification of its authorized common capital stock into preferred shares and the change in par value of its common shares. Following the IPO, and assuming the primary offer is fully subscribed, TVIRD will have approximately 2.72 billion common shares outstanding.
• In the Preliminary Prospectus, TVIRD has indicated that it proposes to use the net proceeds from the primary offer to fund certain capital expenditures for the construction, development and operation of TVIRD’s Balabag Gold-Silver Project in Zamboanga del Sur.
• TVIRD will not receive any proceeds from the secondary offer, as the purchase price of the applicable shares will be paid to the selling shareholders, Prime Resource Holdings Inc. and TVI International Marketing Limited (“TIML”), a wholly-owned subsidiary of TVI. TIML has determined to sell up to 42.09 million of its TVIRD shares in connection with the secondary offer, which represents approximately 1.55% of the projected 2.72 billion common shares outstanding of TVIRD following the IPO. TVI expects that the net proceeds from the sale of TVIRD shares by TIML will be distributed to TVI, to be used by TVI for working capital and project evaluation activities.
• BDO Capital & Investment Corporation (“BDO Capital”), the investment banking arm of BDO Unibank, Inc., is expected to act as the issue manager and to underwrite the offer, subject to the finalization of the offer and offer terms following the book building process and agreement on customary documentation, among other conditions. The book building process is expected to begin on October 12 and end on November 26.
• Subject to securing all pre-requisite regulatory approvals, the final offer price for the IPO is expected to be set on November 26. This will then be followed by an offer period expected to commence on December 7 and end on December 11. The shares are targeted to be listed on the Main Board of the PSE on December 18, 2015.
• If the maximum number of TVIRD shares are sold in the primary offer, TIML’s equity holdings in TVIRD would be diluted by 10% from 30.66% to 27.60%. Following the secondary offer, and assuming TIML disposes of the full 42.09 million shares proposed to be sold by it, TIML will hold approximately 26.05% of the number of issued and outstanding TVIRD shares.
• The selling shareholders have agreed to a lock-up period of 180 days after the listing date of TVIRD’s shares on the PSE, during which time they will be restricted from disposing of any further shares in TVIRD.
• Completion of the IPO will be subject to the satisfaction or waiver of a number of conditions, including completion of a due diligence review of TVIRD by BDO Capital, the representations and warranties of TVIRD provided in the underwriting agreement being true and correct and there being no material adverse change affecting TVIRD. In addition, BDO Capital will be entitled to cancel or terminate its underwriting commitment in certain circumstances, including upon the occurrence of certain events that would materially and adversely affect the distribution of the TVIRD shares in the Philippines or in the event PSE approval to list the TVIRD shares is canceled or terminated.

Chairman and Chief Executive Officer of TVI and Chairman of TVIRD, Clifford James, stated

The filing of the Preliminary Prospectus represents a major milestone in TVIRD’s IPO process, TVI Pacific continues to enthusiastically support the TVIRD IPO as we believe the establishment of a public market for TVIRD shares will allow North American investors to better evaluate the value of TVI’s indirect investment in TVIRD.”
In addition, we expect that the secondary offer component of the IPO and the liquidity associated with a public listing will allow TVI to monetize portions of its TVIRD holdings which could provide us with an ongoing source of non-dilutive funding during a time when capital is difficult to raise for new project acquisition and development activities

Connect with  TVI Pacific Inc. (TSX:TVI) (OTCQB:TVIPF) to learn more