Metals News
UPDATE 2-Vedanta Delays $1.1 bln Zambian Copper IPO
industry news

LONDON, Nov 30 (Reuters) - London-listed Indian miner Vedanta (VED.L) has delayed an initial public offering (IPO) of its Zambian copper business until next year, citing stock market volatility.

It is the first big European IPO to fall victim to a renewed wave of financial market turbulence brought on by the Irish debt crisis.

Earlier this month, Vedanta announced plans to list Konkola Copper Mines (KCM), the second-biggest integrated copper producer in Africa, selling new and existing shares to raise about $1.1 billion to be used by KCM to boost output.

Kishore Kumar, chief executive of KCM's holding company Konkola Resources, had told Reuters the London listing was expected next month, while a source close to the deal had said final pricing was expected in mid-December.

But the company said on Tuesday the listing was not expected before next year.

"With year end approaching and the current stock market volatility, the boards of Vedanta Resources plc and Konkola have decided to pursue such listing in 2011," it said in a statement.

After a relative resurgence in European offerings in October and early November, supported by stock markets trading at two-year highs, concerns over euro zone debt following Ireland's bailout have increased market turbulence. .FTEU3

The IPO market is also winding down. No further new deals are likely to be launched this year as there would not be enough time to complete the usual month-long process and allow newly listed shares to trade properly before the Christmas break.
Shares in Vedanta, which also plans to list its Indian Sterlite Energy commercial power generation subsidiary, fell sharply following the announcement but recovered some losses to trade 0.5 percent lower at 2,000 pence by 1130 GMT.

Vedanta has an indirect 79.4 percent stake in KCM, with the remainder held by ZCCM Investments Holdings, majority-owned by the Zambian government. Vedanta will retain a majority of KCM, which will also be listed in the Zambian capital of Lusaka.

KCM has 404.8 million tonnes of proved and probable mineral reserves, with contained copper of 6.52 million tonnes. It has 20,777 employees and third-party contractors, making it the largest private employer in Zambia.

The group plans to more than double output to 400,000 tonnes a year by 2014 from around 173,000 tonnes and to cut integrated cash costs to below $1 per pound from $1.80.

Goldman Sachs and JP Morgan Cazenove are acting as joint sponsors and co-ordinators of the offer.



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