Ferrous pulls London IPO

Finance

Publishing Date: 02 Jun 2010 5:19pm GMT
Author: Mining Journal

Ferrous Resources Ltd, the Brazilian iron ore company that was preparing to raise up to US$400 million in a London initial public offering (IPO), has withdrawn from the process citing “considerable volatility in the equity markets.”

The company announced its intention to list just two weeks ago, having already shelved a listing in 2008, the offer was set to include the sale of shares by existing shareholders.

Gordon Toll, the company’s executive chairman said: “We remain convinced of the strengths of the Ferrous business model and its suitability as a public company. We will re-evaluate our options when market conditions improve."

Ferrous has five assets in the Iron Quadrangle region of Minas Gerais, the largest iron-ore producing region in Brazil, and one asset in Bahia state.

The long-term strategy, according to the company, is to become one of the world’s largest iron-ore producers, with production of 65Mt/y by 2016.

According to today’s statement the Ferrous still has nearly US$500 million in cash.

The company has privately raised over US$1.2 billion in the past few years. The last significant placing (in October 2008) implied an overall company value of US$3.6 billion.