CORRECT: Ivanhoe Investor Says He Hasn't Put His Stake Up For Sale
14 Gennaio 2010 - 8:59PM
Dow Jones News
HONG KONG—Ivanhoe Mines Ltd.'s (IVN) biggest shareholder said he
hasn't put his stake in the Vancouver company up for sale.
People familiar with the deal said Robert Friedland was seeking
to sell his 23% stake as the company looks to finance development
of a giant copper and gold deposit in Mongolia.
Ivanhoe has a market capitalization of about 7.5 billion
Canadian dollars, or roughly US$7.25 billion, based on Wednesday's
closing share price. That values Friedland's stake at about US$1.7
billion. Ivanhoe's stock price has nearly quintupled in the past 12
months, boosted by Ivanhoe's agreement last October to develop the
Oyu Tolgoi mine in Mongolia.
Ivanhoe said last week that it was evaluating possible asset
sales and other financing options as it faces costs of more than
US$2 billion to develop the Oyu Tolgoi project.
Friedland's stake has been shopped to Chinese sovereign-wealth
fund, China Investment Corp., one of the people familiar with the
situation said.
The fund has the wherewithal to invest in Oyu Tolgoi's
development, and China is hungry for natural resources to fuel its
growth. But the fund's level of interest wasn't known and bankers
often present the fund with investment opportunities it doesn't
pursue. A representative for the fund declined to comment.
State-backed Chinese energy companies also could be potential
buyers for the stake, one of the people familiar with the situation
said.
Anglo-Australian mining company Rio Tinto (RIO.AU, RIO.LN), a
partner in the Oyu Tolgoi project, owns 19.7% of Ivanhoe and can
raise its stake to as much as 46.6% under the companies' financing
agreement. Rio Tinto has the right to match any offer for
Friedland's stake in Ivanhoe, according to the 2006 press release
announcing the relationship.
Purchasing Friedland's stake could force Rio to make an offer
for the rest of the company and Rio presumably would welcome a
well-heeled partner such as China. A Rio Tinto spokesman in London
declined to comment on the Ivanhoe stake.
SouthGobi Energy Resources Ltd. (SGQ.T), a coal company of which
Ivanhoe owns 79%, is seeking US$462 million from an initial public
offering of shares in Hong Kong late this month, according to a
term sheet. China Investment Corp. and Singapore's Temasek Holdings
Pte. Ltd. each has pledged to purchase US$50 million in shares of
SouthGobi, the largest exporter of coal from Mongolia.
Ivanhoe hired global investment-banking firm Citigroup Inc. (C)
and Hatch Corporate Finance, a London-based mining-industry
adviser, to explore its financing options. Ivanhoe said it will
consider debt and equity offerings, a credit facility, a sale of
subsidiaries, project financing or other corporate
transactions.
-By Nisha Gopalan, Dow Jones Newswires; 852-2832-2343;
nisha.gopalan@dowjones.com
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