Mongolia Tavan Tolgoi Still Aiming For Up To US$3 Billion Hong Kong, Ulan Bator, UK Listing - Official
The Mongolian government's multiple listing of state-owned Erdenes-Tavan Tolgoi Co. valued at up to US$3 billion may be delayed until September or October because the company is still seeking dispensation to list in Hong Kong, a Mongolian government official said Thursday.
The company plans to list simultaneously in Ulan Bator and London, too, as it seeks to raise at least US$1.5 billion from the sale and possibly as much as US$3 billion.
It is still "very keen," however, to list by June, when Mongolia has parliamentary elections, the official said.
Earlier this year people familiar with the situation said the plan for a Hong Kong listing simultaneously with London and Ulan Bator was shelved because the Hong Kong exchange was unlikely to make special dispensation for a Mongolian incorporated company to list on the bourse.
Hong Kong recognizes more than 20 jurisdictions in which companies seeking to list in the territory can be incorporated. Apart from Hong Kong, these include China, Italy and the U.K.
"Listing in Hong Kong is still on our radar. Our Financial Regulation Committee (officials) will meet the Hong Kong Securities and Futures Commission very soon to sort out the issues such as Hong Kong recognizing the listing of a Mongolian registered company," the official said, without saying when.
Erdenes-Tavan Tolgoi Co. controls a coking-coal deposit in the South Gobi desert near China's northern border. It is the world's largest.
Mongolia's government plans to hold a majority 51% stake after Tavan Tolgoi lists, offloading 19% to global investors.
The rest will go to Mongolian citizens and companies. Specifically, 20% will be given to citizens for free and another 10% to local companies at a discount--a distribution of shares that is problematic in a country where many people don't have brokerage--or even bank--accounts.
But the official said Thursday citizens will be allowed to return shares to the state, which will then offer them to domestic companies. Funds raised from this will be returned to the citizens.
"This return of shares is also an issue that is being discussed with the authorities in Hong Kong," the official said.
Mark Dickens, head of listing at Hong Kong stock exchange operator Hong Kong Exchanges & Clearing Ltd. (0388.HK), declined to comment on Tavan Tolgoi's plans or if HKEx will grant the waiver sought. He did say such decisions will be made "at the appropriate time and on a case-by-case basis, depending on the quality of each individual company."
HKEx is, however, "keen to work with the Mongolian regulators to facilitate the listing of Mongolian issuers in Hong Kong," he added.
Hong Kong has made attracting mining companies to its exchange a priority. It changed rules in 2010 to make it easier for them to raise capital for existing discoveries.
Mongolian Mining Corp. (0975.HK)--which operates an adjacent deposit to Erdenes-TT--listed in Hong Kong two years ago, raising US$650 million.
A US$3 billion fundraising could value Tavan Tolgoi at around US$10 billion and more than double the market capitalization of Ulan Bator's stock exchange, now about $2 billion.
A Tavan Tolgoi IPO would be one of the biggest in Hong Kong this year. Other huge deals set for 2012 are the US$6 billion IPO by People's Insurance Co. (Group) of China Ltd., a state-owned property insurer; and the US$5 billion float of China Guangfa Bank, a provincial bank 20% owned by Citigroup.
Goldman Sachs Group Inc., Deutsche Bank AG, BNP Paribas SA and Macquarie Group Ltd. are handling the Tavan Tolgoi IPO.
Copyright © 2012 Dow Jones Newswires
The company plans to list simultaneously in Ulan Bator and London, too, as it seeks to raise at least US$1.5 billion from the sale and possibly as much as US$3 billion.
It is still "very keen," however, to list by June, when Mongolia has parliamentary elections, the official said.
Earlier this year people familiar with the situation said the plan for a Hong Kong listing simultaneously with London and Ulan Bator was shelved because the Hong Kong exchange was unlikely to make special dispensation for a Mongolian incorporated company to list on the bourse.
Hong Kong recognizes more than 20 jurisdictions in which companies seeking to list in the territory can be incorporated. Apart from Hong Kong, these include China, Italy and the U.K.
"Listing in Hong Kong is still on our radar. Our Financial Regulation Committee (officials) will meet the Hong Kong Securities and Futures Commission very soon to sort out the issues such as Hong Kong recognizing the listing of a Mongolian registered company," the official said, without saying when.
Erdenes-Tavan Tolgoi Co. controls a coking-coal deposit in the South Gobi desert near China's northern border. It is the world's largest.
Mongolia's government plans to hold a majority 51% stake after Tavan Tolgoi lists, offloading 19% to global investors.
The rest will go to Mongolian citizens and companies. Specifically, 20% will be given to citizens for free and another 10% to local companies at a discount--a distribution of shares that is problematic in a country where many people don't have brokerage--or even bank--accounts.
But the official said Thursday citizens will be allowed to return shares to the state, which will then offer them to domestic companies. Funds raised from this will be returned to the citizens.
"This return of shares is also an issue that is being discussed with the authorities in Hong Kong," the official said.
Mark Dickens, head of listing at Hong Kong stock exchange operator Hong Kong Exchanges & Clearing Ltd. (0388.HK), declined to comment on Tavan Tolgoi's plans or if HKEx will grant the waiver sought. He did say such decisions will be made "at the appropriate time and on a case-by-case basis, depending on the quality of each individual company."
HKEx is, however, "keen to work with the Mongolian regulators to facilitate the listing of Mongolian issuers in Hong Kong," he added.
Hong Kong has made attracting mining companies to its exchange a priority. It changed rules in 2010 to make it easier for them to raise capital for existing discoveries.
Mongolian Mining Corp. (0975.HK)--which operates an adjacent deposit to Erdenes-TT--listed in Hong Kong two years ago, raising US$650 million.
A US$3 billion fundraising could value Tavan Tolgoi at around US$10 billion and more than double the market capitalization of Ulan Bator's stock exchange, now about $2 billion.
A Tavan Tolgoi IPO would be one of the biggest in Hong Kong this year. Other huge deals set for 2012 are the US$6 billion IPO by People's Insurance Co. (Group) of China Ltd., a state-owned property insurer; and the US$5 billion float of China Guangfa Bank, a provincial bank 20% owned by Citigroup.
Goldman Sachs Group Inc., Deutsche Bank AG, BNP Paribas SA and Macquarie Group Ltd. are handling the Tavan Tolgoi IPO.
Copyright © 2012 Dow Jones Newswires
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