MANILA, Philippines – SM Investments Corporation (SMIC) plans to move one of its strongest performing portfolio investments, Atlas Mining, out of the Sy family’s flagship conglomerate by 2027, with leadership expecting their logistics and renewable energy companies to take on a bigger role in filling the hole left behind.

SMIC plans to transfer its roughly 34% stake in Atlas into Dominion Holdings, separating mining from SMIC without necessarily taking the business out of the Sy family’s hands completely.

“The intention for SMIC is to completely move out from the mining sector,” SMIC president and chief executive officer Frederic DyBuncio said during the conglomerate’s first-half earnings briefing on Wednesday, August 12. “We want to move the shareholding we have in Atlas into another listed entity, which will still be owned by the family.”

That listed company will be Dominion Holdings.

“Atlas is the one that’s in SMIC. We’re going to intend to move that to one of our other listed entities that will bring it into Dominion Holdings,” DyBuncio said, adding that the restructuring would “most likely” be completed in 2027.

Atlas’ main business is producing copper concentrate, with gold and silver as byproducts, through its Toledo copper mine in Cebu. Atlas also has operations in nickel, mineral exploration, and water source development.

But Atlas will not be a small business for SMIC to replace.

Atlas has “really come back roaring,” SMIC executive vice president for finance Franklin Gomez said during the briefing, helped by stronger copper and gold prices. Portfolio investments now account for 11% of SMIC earnings, up from 7%, with Atlas described as a major contributor.

That helped SMIC grow H1 net income by 8% to P45.9 billion, while consolidated revenues rose 6% to P339.2 billion. Banking contributed 47% of group earnings, property 27%, retail 15%, and portfolio investments the remaining 11%.

Losing Atlas from SMIC will leave a hole to fill among those portfolio investments.

“I think the portfolio investments today are really driven by Atlas and 2GO,” DyBuncio said. Once Atlas is transferred, he expects the segment’s contribution to “probably go slightly down.”

SMIC is looking to logistics and renewable energy to eventually make up more of that contribution.

“I think we’re really growing our logistics business and the renewable business,” DyBuncio said. “For the renewable business, we actually have now six concessions which we’re trying to develop.”

2GO is already growing across shipping, freight, passenger transport, warehousing and e-commerce logistics, while SMIC’s Philippine Geothermal also benefited from higher energy prices during the first half.

Atlas still to be Sy-linked

SMIC currently holds a 33.74% stake in Atlas. The other major shareholder bloc is the Ramos family of National Book Store, through Anglo Philippine Holdings (27.14%), and Alakor Corporation (3.92%).

The Consunji family also has a smaller foothold in Atlas, although it is not part of either controlling bloc. DMCI Holdings and Semirara Mining and Power chairman Isidro Consunji is an Atlas director and is separately listed as beneficially owning 2.70%, or about 96 million shares. He has sat on the boards of both Atlas and its copper-mining subsidiary Carmen Copper since 2012.

The exact number of Atlas shares to be transferred to Dominion and the structure and valuation of the transaction have yet to be disclosed. 

Once the transfer pushes through, Dominion Holdings could change from a once relatively sleepy holding company to a mining investment vehicle where the business interests of the Sys and Consunjis intersect.

Sy-linked Monte Sur Equity Holdings controls 70% of Dominion, while DFC Holdings, a company associated with the Consunji group, owns another 8.87%. Its board similarly brings together figures from both camps. DyBuncio is Dominion’s president and a director, Henry Sy Jr. sits on its board, while Consunji became Dominion chairman in March. 

That makes the planned Atlas transfer not necessarily an exit by the Sy family from mining than a reorganization of where those mining assets sit.

Dominion had already been linked to Atlas before SMIC’s confirmation. In April, Dominion told the PSE that it was considering “various potential and strategic investments” after it was asked to clarify a report that the Sy family could inject its Atlas stake and other mining interests into the company. At the time, Dominion said its board had not yet approved any specific investment. – Rappler.com