Erdenes Tavan Tolgoi to raise up to USD 400 million in 2012 - COO
Reuters quoted Mr Graeme Hancock COO of Mongolia's state owned Erdenes Tavan Tolgoi, owner of one of the world's largest coking coal deposits, as saying that it will need to raise up to USD 400 million this year if its planned float does not go ahead by December 2012.
Erdenes Tavan Tolgoi had been planning to list 29% of the company in London and Hong Kong by May 2012 in a float that analysts expect could raise about USD 3 billion, but it cannot go ahead until Mongolia's parliament passes a securities law.
Once it is passed, the IPO timing could also be affected by progress on government talks with a consortium of companies from Russia, China, Japan, South Korea and the United States to develop the west Tsankhi portion of the big Tavan Tolgoi deposit, and talks on developing rail routes from the mine. Resolution of those issues would help improve valuations on the company ahead of an IPO. With the float pushed back, the company is going to need to raise funds to pay for work at the site.
Mr Hancock said that "Provided we could list late this year, USD 400 million should cover everything we would want to do." He added that the company would probably look to raise USD 200 million first, then raise more later, depending on the timing of an IPO.
Mr Hancock said there were too many uncertainties to be able to predict whether the IPO would even go ahead this year at all. He added that "If the securities law is not passed in this current session of parliament and it's not passed until later this year, then that might defer us again. We are hopeful it will get passed in this current session of parliament. There is no guarantees, though."
Mr Hancock said that without passage of the securities law, Erdenes Tavan Tolgoi would not be allowed to list in Hong Kong, which is one of the reasons why the IPO was deferred. He added that "The Mongolian government wants to maintain a strong relationship with Hong Kong and this is part of relationship building. For us to just list in London means that we’re leaving out the opportunity for people in the region to participate to the same degree. So I think that drives this decision."
The mine is already producing at a rate of 2.5 million tonnes a year. It aims to produce 3 million tonnes this year, doubling to 6 million tonnes in 2013, and ramping up eventually to 20 million tonnes a year for 50 years.
Source - Reuters
Erdenes Tavan Tolgoi had been planning to list 29% of the company in London and Hong Kong by May 2012 in a float that analysts expect could raise about USD 3 billion, but it cannot go ahead until Mongolia's parliament passes a securities law.
Once it is passed, the IPO timing could also be affected by progress on government talks with a consortium of companies from Russia, China, Japan, South Korea and the United States to develop the west Tsankhi portion of the big Tavan Tolgoi deposit, and talks on developing rail routes from the mine. Resolution of those issues would help improve valuations on the company ahead of an IPO. With the float pushed back, the company is going to need to raise funds to pay for work at the site.
Mr Hancock said that "Provided we could list late this year, USD 400 million should cover everything we would want to do." He added that the company would probably look to raise USD 200 million first, then raise more later, depending on the timing of an IPO.
Mr Hancock said there were too many uncertainties to be able to predict whether the IPO would even go ahead this year at all. He added that "If the securities law is not passed in this current session of parliament and it's not passed until later this year, then that might defer us again. We are hopeful it will get passed in this current session of parliament. There is no guarantees, though."
Mr Hancock said that without passage of the securities law, Erdenes Tavan Tolgoi would not be allowed to list in Hong Kong, which is one of the reasons why the IPO was deferred. He added that "The Mongolian government wants to maintain a strong relationship with Hong Kong and this is part of relationship building. For us to just list in London means that we’re leaving out the opportunity for people in the region to participate to the same degree. So I think that drives this decision."
The mine is already producing at a rate of 2.5 million tonnes a year. It aims to produce 3 million tonnes this year, doubling to 6 million tonnes in 2013, and ramping up eventually to 20 million tonnes a year for 50 years.
Source - Reuters
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