GRAM weighs PanAust IPO
12:00AM June 5, 2018
Guangdong Rising Assets Management is believed to be weighing a potential initial public offering of PanAust, the Australian gold and copper miner it bought three years ago in a $1.2 billion listed takeover battle.
GRAM is mulling a possible listing of the business as Energy and Minerals Group tries to float Coronado Coal as a $2 billion-plus entity and after Jupiter Mines recently listed as a $800 million business, raising $240m.
Corporate activity in mining has started to stage a revival after the sector’s downturn, which ended last year when commodity prices began to rally, but they are still some way off their peak during the resources boom about a decade ago.
Whether advisers are yet on board for GRAM remains unclear, but the thinking is that the time is right for PanAust to go back to the future. Copper prices recently rallied and gold prices remain relatively high.
During the 2015 takeover, GRAM was advised by J.B North & Co. PanAust used Rothschild.
Some of GRAM’s assets in Laos that are part of the PanAust business, including the Phu Kham Copper-Gold Operation and the Ban Houayxai Gold-Silver Operation, are coming to the end of their production life.
For this reason, perhaps the business could list at a price less than what GRAM paid, given the three years of cash flow that the Chinese group has already extracted from the assets.
PanAust also includes an 80 per cent interest in the Frieda River copper-gold project in Papua New Guinea.
An entire selldown would probably be on the cards for GRAM, which is a Chinese state-owned enterprise, and this is expected to make a move towards an IPO of the business risky.
Meanwhile, the float of Coronado Coal through Goldman Sachs, UBS and Bell Potter remains under scrutiny. The big question is whether the private equity owners will be asking equity investors to pay more for the Curragh coal mine in Queensland than the $700m it paid to buy it from Wesfarmers.
The company also consists of three metallurgical mines in the US: Buchanan mine and the Logan and Greenbrier mines in Virginia and West Virginia.
A non-deal roadshow for the potential $1bn IPO was under way last month and the jury is still out on whether it will gain enough support to list.
The company is one of the five largest metallurgical coal producers in the world, based on 2017 figures. It is understood the group is eager to list in Australia, which is an experienced resources market with a scarcity of pure metallurgical coal businesses on the ASX.
Elsewhere, Marley Spoon’s owners appear to have locked in enough demand to float the company.
The book build was only just covered last night.
The meal kit company’s market value is $199.5m and shares were sold at $1.42 each. It is expected to list on July 2.
https://www.theaustralian.com.au/bu...o/news-story/9f328097f1c6da0ae9133657aeb1b4d5
