HomeBase MetalsVedanta delays Konkola IPO till next year

Vedanta delays Konkola IPO till next year

Part of Konkola
Copper Mines
London, England — MININGREVIEW.COM — 02 December 2010 – Indian miner Vedanta “’ an LSE-listed, diversified mining and metals company “’ has delayed an initial public offering (IPO) of its Zambian copper business until next year, citing stock market volatility as the main reason.

Reuters reports that it is the first big European IPO to fall victim to a renewed wave of financial market turbulence brought on by the Irish debt crisis.

Earlier this month, Vedanta announced plans to list Konkola Copper Mines (KCM) “’ the second-biggest integrated copper producer in Africa “’ selling new and existing shares to raise about US$1.1 billion (R7.8 billion) to be used by KCM to boost output.

Kishore Kumar, chief executive of KCM holding company Konkola Resources, had told Reuters the London listing was expected next month, while a source close to the deal had said final pricing was expected in mid-December.

Now the company has stated that the listing is not expected before next year. “With year-end approaching and the current stock market volatility, the boards of Vedanta Resources plc and Konkola have decided to pursue such listing in 2011,” it said in a statement.

After a relative resurgence in European offerings in October and early November, supported by stock markets trading at two-year highs, concerns over Euro zone debt following Ireland’s bailout have increased market turbulence.

Reuters reports that the IPO market is also winding down. No further new deals are likely to be launched this year as there would not be enough time to complete the usual month-long process and allow newly listed shares to trade properly before the Christmas break.

Vedanta has an indirect 79.4% stake in KCM, with the remainder held by ZCCM Investments Holdings, which is majority-owned by the Zambian government. Vedanta will retain a majority of KCM, which will also be listed in the Zambian capital of Lusaka.

KCM has 404.8Mt of proved and probable mineral reserves, with contained copper of 6.52Mt. The group plans to more than double output to 400 000tpa by 2014 from around 173 000tpa, and to cut integrated cash costs to below US$1 per pound from US$1.80.