resourcehouse

Australian mining boss to tap HK market


Naomi Rovnick
Sep 11, 2009

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Clive Palmer, the Australian mining billionaire and football team owner, is working to raise about US$2 billion to US$3 billion in a Hong Kong initial public offering of his resources assets.
The company, to be named Resourcehouse, would hold a selection of Palmer's mining interests, including iron ore deposits and coal mines in Western Australia, sources briefed on the deal said.



Palmer, Australia's fifth-richest man and owner of the Gold Coast United football team, has already built a fortune he most recently estimated at A$6.5 billion.

The mining magnate owns 160 billion tonnes of iron ore in Western Australia's Pilbara Ranges, and the Waratah Coal mine in Queensland.

He also bought the vast but loss-making Yabulu nickel mine from BHP Billiton in July, and is the largest shareholder of miner Australasian Resources Holdings. Sources said these assets were unlikely to form part of Resourcehouse.

Palmer has tapped investment banks Macquarie and UBS to handle the deal, which is a revival of an earlier Hong Kong flotation plan he shelved late last year.

The previous deal had a very different structure. Palmer had planned to combine Australasian Resources, a mining company in which he owns the majority stake, with some of his other businesses before launching the combined entity on the Hong Kong exchange in a vehicle to be called RDI.

Palmer could not be reached, while UBS and Macquarie also declined to comment.

Palmer wants to raise the cash to improve transport facilities around his iron ore and coal mines. A banker who has met Palmer several times added the magnate was keen to get Chinese investors involved in his mining empire, which already has strong links to the mainland.

Palmer, who keeps an office in Beijing, already has a joint venture with Hong Kong-listed resources conglomerate Citic Pacific (SEHK: 0267). In 2006, Citic paid an upfront US$215 million for the rights to mine up to six billion tonnes of magnetite at Cape Preston, a Western Australian site owned by Palmer's Mineralogy group.

A flamboyant member of Australian high society, Palmer is a major donor to Queensland's right-wing Liberal National Party. He maintains a fleet of private jets and helicopters and owns a racehorse stud with more than 120 brood mares. He has also pledged to donate US$1 billion to charities over his lifetime.

Sources briefed on Palmer's initial public offering plans said his advisers were still talking to the stock exchange about which of his mining assets were most suitable for sale to Hong Kong investors.

Meanwhile, two mainland leisure sector stocks were seeking to raise a combined HK$3.1 billion by selling shares on Hong Kong's main board, market sources said.

Professional sportswear retailer and manufacturer Peak Sport Products is marketing HK$1.9 billion worth of new shares at HK$3.55 to HK$4.55 each while menswear firm China Lilang is offering 300 million new shares for HK$1.2 billion.

Bank of America Merrill Lynch and HSBC (SEHK: 0005, announcements, news) are advising the share sale of China Lilang while Credit Suisse is arranging the Peak Sport flotation.

Hong Kong's capital markets have been abuzz since late last month, with accounting firm Grant Thornton expecting 40 companies to complete their offerings by the end of the month.

Apart from the two mid-sized offerings, Metallurgical Corp of China is seeking to raise HK$19 billion in the city's biggest flotation in 18 months.

The company is expected to open retail subscriptions today by offering 1.4 billion shares, representing 5 per cent of the total offering, at HK$6.16 to HK$6.81 each.

Additional reporting by Wong Ka-chun