MANILA - Mining firm Benguet Corp. may list a unit in the local stock exchange after running into financially and legal troubles.

The Romualdez-led firm told the local bourse on Friday that it has tapped First Metro Investment Corp. as the financial adviser, issue manager, and lead underwriter for its nickel project in Sta. Cruz, Zambales.

The company has earlier formed Benguet Corp. Nickel Mines Inc. to handle its nickel operations there.

"The company intends to operationalize the project through a newly-created subsidiary that will undertake listing and public offering in the near future. The mining property, which is a nickel laterite mine with a total area of 1,406 hectares, is covered by an approved mineral production sharing agreement," Benguet said.

The subsidiary has an authorized capital stock of P10 million, which is divided into 10 million shares valued at P1 apiece. Benguet is the major shareholder of the said firm, accounting for 25% of authorized capital stock.

Benguet in default?

Creditors of Benguet Corp. issued a notice of default to the country’s oldest miner after it failed to update payments on some P316 million in matured loans. The firm availed a secured a P4.2-billion loan in the 80's to fund the development of its Antamok gold project in the town of Itogon in Benguet.

However, the mining firm is contesting the default notice given the absence of an updated list and voting among the group of creditors.

The company told the exchange that under a debt restructuring deal, "there is a need for a vote of the majority creditors before the company can be declared in default."

The As of end-2008, the miner’s loans subject to the repayment plan amounted to P2.9 billion, higher than the P2.3 billion in 2007.

The board of the stock exchange is reportedly discussing halting the trading of Benguet's shares.

Last week, Benguet signed an offtake/contractor agreement with Consunji-led DMCI Mining Corp. for the production and sale of high-grade nickel ore for up to 200,000 tons annually for the next 3 years.