Canada-listed mining group SouthGobi Energy Resources Ltd. plans to raise about $400-million from a Hong Kong initial public offering this month, according to a term sheet obtained by Reuters.
SouthGobi, which started IPO pre-marketing on Monday, is focused on exploring and developing metallurgical and thermal coal deposits in Mongolia and Indonesia. Its flagship coal mine, Ovoot Tolgoi in Mongolia, sells coal to buyers in China.
SouthGobi is almost 80 per cent owned by Vancouver-based Ivanhoe Mines , with the bulk of its remaining shares held by institutional investors and mutual funds.
Of the offering, 75 per cent would be allocated to institutional investors, 15 per cent to Canadian investors and 10 per cent to Hong Kong retail investors, the term sheet said.
The company will kick off a marketing road show on Jan. 11, aiming to list on Jan. 29 under the symbol "1878".
The company said it planned to use the proceeds to expand production capacity and access regional infrastructure and coal transportation requirements.
In October, China's sovereign wealth fund, China Investment Corp. invested $500-million in SouthGobi to help the company accelerate development of its Mongolian coal projects.
Citigroup and Macquarie are handling the IPO.