SouthGobi Energy eyes $400 mln HK IPO - term sheet

HONG KONG, Jan 4 (Reuters) - Canada-listed mining group SouthGobi Energy Resources Ltd (SGQ.TO) 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 premarketing 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 percent owned by Vancouver-based Ivanhoe Mines (IVN.TO), with the bulk of its remaining shares held by institutional investors and mutual funds.

Of the offering, 75 percent would be allocated to institutional investors, 15 percent to Canadian investors and 10 percent 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" 1878.HK.

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 [CIC.UL] invested $500 million in SouthGobi to help the company accelerate development of its Mongolian coal projects.

Citigroup (C.N) and Macquarie (MQG.AX) are handling the IPO. (US$1=HK$7.75) (Reporting by Saeed Azhar and Kennix Chim; Editing by Chris Lewis)

Source:Reuters news agency