Friday April 11, 12:39 PM
Mexico's Industrias Penoles to spin off Fresnillo in London IPO UPDATE
(Adds possible proceeds from existing shares)
LONDON (Thomson Financial) - Mexico's Industrias Penoles S.A.B. de C.V. will spin off its precious metals assets into the Fresnillo Group and plans to list the company on the main market of the London Stock Exchange (LSE: LSE.L - news) in May.
Fresnillo, the world's largest primary silver producer, is estimated to be worth about $8 billion and is a potential FTSE 100 candidate.
Proceeds from the new shares in the initial public offering, expected to be about $900 million, will be used by Fresnillo to re-pay existing debt and to finance expansion plans.
The company did not disclose possible proceeds from the sale of existing shares. However implied proceeds of about $1 billion can be estimated as Penoles said it expects to retain about three quarters of the company following the offering.
Fresnillo, Mexico's second-largest gold producer, produced about 34.4 million ounces of silver and approximately 280,000 ounces of gold in 2007 and aims to double silver output within the next 10 years and increase its gold production.
The group owns three operating mines in Mexico: Fresnillo, the world's largest primary silver mine, and Cienega and Herradura, both primarily gold mines, as well as a pipeline of projects.
A further underground mine adjacent to the existing Fresnillo mine is planned and is expected to be a similar size to the existing Fresnillo mine. The company also anticipates starting production at Soledad and Dipolos, in which it holds a 56 percent stake, in 2009 and produce a peak rate of about 100,000 ounces of gold a year in 2010.
In addition to organic projects, Fresnillo is looking at joint ventures as well as continued exploration and acquisitions in Mexico and potentially elsewhere in Latin America.
In 2007, Fresnillo made a pretax profit of $161.0 million on sales of $647.9 million.
JPMorgan Cazenove Ltd. is sole bookrunner and broker for the IPO.
Fresnillo will also have a secondary listing on the Mexican Stock Exchange.
Penoles, which is listed on the Mexican Stock Exchange, will focus on base metals as well as its inorganic chemicals production business.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
