Semirara Mining and Power Corp. (SMPC) saw approximately P18 billion erased from its market capitalization after the government postponed its coal block auction without a new date, shaking investor confidence.
Peter Garnace, equity research analyst at Unicapital Securities Inc., noted that the losses accumulated over just two days as investors "priced in the uncertainty" surrounding the Department of Energy's (DOE) decision.
SMPC, the Philippines' largest coal producer, holds a 50-year contract set to expire in July 2027. The Department of Justice previously rejected the company's request for a 13-year extension, prompting the DOE to initiate a bidding process for the coal blocks.
"As investors reacted to heightened uncertainty around the process, with no clear timeline for the auction, market sentiment is likely to remain cautious, with investors staying on a risk-off stance until greater clarity emerges," Garnace said.
The analyst added that management may prioritize preserving cash to strengthen its balance sheet amid the uncertainty, potentially delaying a highly anticipated dividend declaration.
On Wednesday, SMPC shares rebounded 3.8 percent to close at P27.35 each, but the earlier losses underscored market jitters.
A DOE document dated April 24 stated that the deadline for submission and opening of bid documents had been "postponed until further notice," with the original bidding scheduled for April 28. The DOE said it would address all issues and concerns raised during pre-submission conferences to give participants sufficient time to prepare their bids.