Bloomberg reported that Mongolia whose economy grew the fastest last year will sell new shares in Baganuur JSC coal mining company to raise at least 60 billion MNT (USD 46 million) to help fund infrastructure projects.
Ms Gunsmaa Namgilsuren a senior specialist at the privatization department of the State Property Committee said the government wants to cut its holding to 51% from 75% by selling new shares. It’s now seeking banks to manage the sale.
She said Mongolia state property committee, which is in charge of the tender, set an applications deadline of 6 PM local time on April 18. An underwriter is expected to be selected by the end of May
Gunsmaa said Baganuur founded in 1978 has the sixth largest weighting in the Mongolia Stock Exchange’s benchmark Top 20 Index with a 3.47% share. The company needs cash to expand production and upgrade equipment.
Mongolia which became China’s biggest supplier of coking coal in July is seeking to offer minority stakes in its coal miners to foreign investors to fund roads and power plants that could boost production. Mining companies from Mongolia have raised more than USD 750 million in share sales abroad in the last two years.
The share sales could more than quadruple once state-run coal miner Erdenes Tavan Tolgoi completes a planned USD 3 billion listing in Mongolia, London and Hong Kong later this year. The company is targeting output of 3 million metric tons this year the same as Baganuur’s 2011 production volume.