Report: Mongolia issues Tavantolgoi IPO at HKSE
Reuters agency publishes an article about coal IPO of Tavantolgoi deposit mine of Mongolia — the world’s largest untapped coking deposit which could have offering price of up to US$5-billion.
Bankers from a dozen Wall Street, European and Asia-Pacific investment banks have made pitches to the Mongolian government over the past few days to win the coveted underwriting mandate for the Tavan Tolgoi coal mine.
Investment bankers who took part in the pitching process said the size of the offering could range from US$1.5-billion to US$5-billion, depending on timing. They declined to be named because they were not authorized to talk to the media.
Stories of bankers fighting in an Irish bar in Ulan Bator made the rounds in Hong Kong in the days prior to the formal pitching sessions.
Another hot topic amongst bankers involved concerned Morgan Stanley analyst Battushig Batbold, son of Mongolia’s prime minister. Batbold is a metals and mining analyst for Morgan Stanley in London, according to his LinkedIn profile.
Banks who flew representatives in included Morgan Stanley, Macquarie Group Ltd, Citigroup Inc, JP Morgan Chase & Co, Deutsche Bank AG, Credit Suisse Group AG and UBS AG, the sources said. The banks declined to comment.
The IPO coincides with a battle between resource-hungry Asian governments and global steelmakers to develop the mine, which has estimated reserves of 6.0-6.5 billion tons.
The Mongolian government plans to distribute shares in the company free to all citizens and another chunk to Mongolian corporations, according to officials, bankers and analysts working on the transaction.
“Ten percent of the shares will be given to every citizen of Mongolia,” Algar Namgar, executive director of the Mongolian National Mining Association, told Reuters. “And 10 percent of the shares will be traded to every Mongolian enterprise.”
About 30 percent of the asset is being sold to global investors through the IPO, sources say.
Mongolia plans to keep 51 percent of state-owned holding company Erdenes-Tavan Tolgoi, which controls the deposit, located in the South Gobi desert near China’s northern border.
Tavan Tolgoi is located 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.
Global coal prices have shot up in recent months due to disruptions in several coal-producing countries, including Australia, Indonesia, and South Africa, while demand in Asia, particularly China and India, continues to grow.
In recent months, prices have galloped as massive floods in Australia slashed supplies. The price of Australian thermal coal, a benchmark for Asia, has risen 34% from a year ago to around US$127 a ton while spot prices for coking coal used by steelmakers have shot up more than 50% from a year ago to hover around US$370 a ton.
Bankers from a dozen Wall Street, European and Asia-Pacific investment banks have made pitches to the Mongolian government over the past few days to win the coveted underwriting mandate for the Tavan Tolgoi coal mine.
Investment bankers who took part in the pitching process said the size of the offering could range from US$1.5-billion to US$5-billion, depending on timing. They declined to be named because they were not authorized to talk to the media.
Stories of bankers fighting in an Irish bar in Ulan Bator made the rounds in Hong Kong in the days prior to the formal pitching sessions.
Another hot topic amongst bankers involved concerned Morgan Stanley analyst Battushig Batbold, son of Mongolia’s prime minister. Batbold is a metals and mining analyst for Morgan Stanley in London, according to his LinkedIn profile.
Banks who flew representatives in included Morgan Stanley, Macquarie Group Ltd, Citigroup Inc, JP Morgan Chase & Co, Deutsche Bank AG, Credit Suisse Group AG and UBS AG, the sources said. The banks declined to comment.
The IPO coincides with a battle between resource-hungry Asian governments and global steelmakers to develop the mine, which has estimated reserves of 6.0-6.5 billion tons.
The Mongolian government plans to distribute shares in the company free to all citizens and another chunk to Mongolian corporations, according to officials, bankers and analysts working on the transaction.
“Ten percent of the shares will be given to every citizen of Mongolia,” Algar Namgar, executive director of the Mongolian National Mining Association, told Reuters. “And 10 percent of the shares will be traded to every Mongolian enterprise.”
About 30 percent of the asset is being sold to global investors through the IPO, sources say.
Mongolia plans to keep 51 percent of state-owned holding company Erdenes-Tavan Tolgoi, which controls the deposit, located in the South Gobi desert near China’s northern border.
Tavan Tolgoi is located 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.
Global coal prices have shot up in recent months due to disruptions in several coal-producing countries, including Australia, Indonesia, and South Africa, while demand in Asia, particularly China and India, continues to grow.
In recent months, prices have galloped as massive floods in Australia slashed supplies. The price of Australian thermal coal, a benchmark for Asia, has risen 34% from a year ago to around US$127 a ton while spot prices for coking coal used by steelmakers have shot up more than 50% from a year ago to hover around US$370 a ton.
Comments
Post a Comment