TORONTO (Reuters) - Shares of Ivanplats Ltd IVP.TO, an Africa-focused miner, rose 6.3 percent on the Toronto Stock Exchange on Wednesday after an initial public offering pegged the value of the company at more than C$2.5 billion ($2.55 billion).
Ivanplats, a venture backed by Robert Friedland - one of the best-known project promoters in the mining industry - announced its long-awaited plan to list in Toronto last month.
Chicago-born Friedland is known across the mining industry for his showmanship and flamboyance, almost as much as for his talent in spotting the potential of some of the world’s biggest deposits, among them the Voisey’s Bay nickel deposit in Eastern Canada and the Oyu Tolgoi copper and gold deposit in Mongolia.
Ivanplats, his latest venture, owns the high-grade Kamoa copper deposit in the Democratic Republic of Congo, along with the massive Platreef platinum, gold and copper project in South Africa. It also owns the Kipushi zinc and copper asset in Congo, as well as other assets spread across Congo, South Africa, Gabon and Australia.
Ivanplats priced its offering this week at C$4.75 a share, slightly above the bottom of a range of C$4.50 to C$5.40 a share that the company had been seeking.
The offering, officially expected to close next week, will see the company sell 63.3 million shares for proceeds of C$300.8 million. The shares sold in the IPO represent about 12 percent of Ivanplats’ outstanding shares, before accounting for options, warrants and an over-allotment option granted to underwriters of the deal.
Ivanplats shares began trading on the Toronto Stock Exchange on Wednesday on an “if, as and when issued” basis. Shares rose as high as C$5.20 in early trading and were up about 6.3 percent at C$5.05 at 3 p.m. EDT (1900 GMT).
The exchange said all trades in the stock will be settled on or after October 23, the official closing date of the offering. If the prospectus offering does not close, all current trades will be canceled, no securities will be delivered and no money will be owed by purchasers to sellers.
The 63.3 million share offering was underpinned by one large investor, who has subscribed for about a third of the shares on offer. Ivanplats did not disclose the identity of the investor, but said the investor has agreed to a six-month lock-up period, during which the investor cannot sell the shares.
Friedland, Ivanplats’ executive chairman, will retain 135.3 million shares, or a 25.7 percent stake in the company. He still owns a roughly 10 percent interest in his last venture, Ivanhoe Mines, which is now known as Turquoise Hill (TRQ.TO) and is majority owned by mining giant Rio Tinto (RIO.L) (RIO.AX).
The financier resigned in April as an officer of Ivanhoe, which controls the Oyu Tolgoi project. At the time, many expected him to turn his attention to promoting Ivanplats.
In addition to the total offering, Ivanplats has also given an over-allotment option of 9.5 million shares to the deal’s underwriters, which stand to make more than C$15 million in fees from the IPO. The firms underwriting the deal include Bank of Montreal, Morgan Stanley, Macquarie Capital, Royal Bank of Canada, Canadian Imperial Bank of Commerce, Citigroup, Renaissance Securities and UBS Securities.
As part of the transaction, Ivanplats said roughly $165 million of debt will be converted into about 40.6 million shares at the offering price. In addition, the company has more than 22 million options outstanding - owned by Ivanplats’ officials and others - that are all in the money at this time.
Ivanplats said those converting both the pre IPO debt and options are subject to a six-month lock-up period.
Reporting by Euan Rocha; Editing by Peter Galloway