UPDATE: Ivanhoe Investor Says He Hasn't Put His Stake Up For Sale
14 Gennaio 2010 - 10:06PM
Dow Jones News
Ivanhoe Mines Ltd.'s (IVN) biggest shareholder said Thursday he
hasn't put his stake in the Vancouver company up for sale.
People familiar with the deal said that 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 jumped about five-fold 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 hired Citigroup Inc. (C) and
Hatch Corporate Finance, a London-based mining-industry adviser, to
explore its financing options. The company faces costs of more than
US$2 billion to develop the Oyu Tolgoi project.
Ivanhoe reiterated Thursday in a press release that the two
firms are helping the mining company evaluate a range of options,
including potential debt and equity offerings, a credit facility,
the sale of subsidiaries, equity investments and project financing,
among others.
"However, Mr. Friedland said that no specific transaction is
being considered at this time," Ivanhoe said in the release.
According to one person familiar with the matter, though,
Friedland's stake has been shopped to Chinese sovereign-wealth
fund, China Investment Corp.
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 a right of first refusal to purchase any
shares Friedland chooses to sell, 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.
Shares of Ivanhoe were down 2.5% at $16.75 in late trading
Thursday in New York.
-By Nisha Gopalan, Dow Jones Newswires; 852-2832-2343;
nisha.gopalan@dowjones.com
Grafico Azioni SouthGobi Resources (PK) (USOTC:SGQRF)
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Grafico Azioni SouthGobi Resources (PK) (USOTC:SGQRF)
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