Mongolia to pick banks for mega coal IPO by end Feb
(Reuters) - Mongolia will announce by the end of the month the banks to manage a lucrative IPO for the world's largest untapped coking coal deposit, its prime minister said on Friday.
More than 150 bankers from a dozen Wall Street, European and Asia-Pacific investment banks have made pitches to the Mongolian government to win the coveted underwriting mandate for the Tavan Tolgoi coal mine.
Investment bankers who took part in the pitching process said this week the size of the offering could range from $1.5 billion to $5 billion, depending on timing.
"I understand the (IPO offering) will be substantial," said Sukhbaatar Batbold, who was in Singapore attending a lecture at the National University of Singapore.
"(Choosing the banks) will be a very open, competitive process which will be done by the end of this month. I have no involvement in this process,"
Development of the Tavan Tolgoi coal mine, estimated to house a total of 6 billion tons of coal reserves, could boost its economy by as much as 15 percent by 2015 and double per capita income, the prime minister said.
Mongolia sits on vast quantities of untapped mineral wealth. Analysts say it could be one of the fastest growing economies of the next decade, as well as a key investment target for global mining giants.
"I was very excited to hear the top 55 financial institutions were in Mongolia a couple weeks ago with interest to participate in this specific coking coal IPO," he said.
At up to $5 billion, the deal is not only fairly big in terms of fees, but also has a lot of prestige riding on it. It would be the largest such offering to come from a hot frontier market where similar deals are expected to follow.
Tavan Tolgoi is 400 km (250 miles) from the nearest railway line and lacks infrastructure and power, which has held up development and allowed only very limited production.
(Reporting by Randy Fabi)
More than 150 bankers from a dozen Wall Street, European and Asia-Pacific investment banks have made pitches to the Mongolian government to win the coveted underwriting mandate for the Tavan Tolgoi coal mine.
Investment bankers who took part in the pitching process said this week the size of the offering could range from $1.5 billion to $5 billion, depending on timing.
"I understand the (IPO offering) will be substantial," said Sukhbaatar Batbold, who was in Singapore attending a lecture at the National University of Singapore.
"(Choosing the banks) will be a very open, competitive process which will be done by the end of this month. I have no involvement in this process,"
Development of the Tavan Tolgoi coal mine, estimated to house a total of 6 billion tons of coal reserves, could boost its economy by as much as 15 percent by 2015 and double per capita income, the prime minister said.
Mongolia sits on vast quantities of untapped mineral wealth. Analysts say it could be one of the fastest growing economies of the next decade, as well as a key investment target for global mining giants.
"I was very excited to hear the top 55 financial institutions were in Mongolia a couple weeks ago with interest to participate in this specific coking coal IPO," he said.
At up to $5 billion, the deal is not only fairly big in terms of fees, but also has a lot of prestige riding on it. It would be the largest such offering to come from a hot frontier market where similar deals are expected to follow.
Tavan Tolgoi is 400 km (250 miles) from the nearest railway line and lacks infrastructure and power, which has held up development and allowed only very limited production.
(Reporting by Randy Fabi)
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