China’s Shandong Gold is set to raise $1bn through a Hong Kong listing to bolster its hunt for acquisitions.
The state-owned miner said it had received approval from Hong Kong’s listing committee to sell 377m shares in the company.
The capital raise comes following a broad-based slump in shares of global gold miners on the back of weak gold prices. Gold is set for its fifth monthly fall in price this month.
Shandong Gold said in its listing prospectus that it aims to become one of the world’s largest gold companies through acquisitions.
Last year Shandong Gold bought a 50 per cent stake in Barrick Gold’s Veladero mine in Argentina. The IPO proceeds will be used to pay back $972m in loans taken out to pay for the deal, according to a prospectus.
The company is one of China’s largest gold miners, and made a net profit of Rmb612m ($90m) in the first half of the year. Shanghai-listed shares in Shandong have fallen by 27 per cent year-to-date to trade at Rmb22.44 a share.
In July Shandong signed an “enhanced strategic co-operation” agreement with Barrick Gold during a visit to the company by Barrick’s executive chairman John Thornton. The two companies have also agreed to look at making acquisitions together.
Shandong is also carrying out a study on Barrick’s Lama project, which is nearby the Veladero mine in Argentina, according to the company.
CCB International, China Securities International and ICBC International are the joint bookrunners for the IPO.
Source: FT.com
