Wednesday April 23, 11:09 AM
Czech NWR IPO aims to raise up to 1.1 bln pounds; views growth in Poland UPDATE
(Recasts to add company and analyst comments, background)
PRAGUE (Thomson Financial) - Czech coal miner New World Resources aims to raise up to 1.1 billion pounds in an initial public offering, with proceeds intended for growth in the region, while it still eyes privatisation opportunities in its coal-rich neighbour Poland.
The company set its initial public offering price range at 10.75 to 13.25 pounds per share, valuing the offering at 892 million to 1.1 billion pounds, with shares to be listed on the main markets of the London, Prague, and Warsaw stock exchanges in early May.
The IPO, already several years in the making, will be the largest in Prague's history and the largest in London so far in 2008, and comes after the group postponed plans in December due to 'unfavourable' market conditions.
'We believe this is the appropriate time for a share listing,' Zdenek Bakala, NWR's vice-chairman, told reporters in Prague on Wednesday.
Petr Novak, an analyst with Atlantik FT brokerage in Prague, said investors are likely to react positively to the offering.
'The company has strong fundamentals... and should post positive results in the next few years,' Novak said.
The offering will include up to 83.01 million shares, or 31.5 percent of NWR's share capital, and gives the company an expected market capitalisation of 2.8 billion to 3.5 billion pounds excluding an over-allotment, NWR said.
The offering includes 69.5 million existing shares and up to 13.5 million new shares, along with an over-allotment of 15 percent of offered shares.
With the over-allotment, the free float of the company would grow to 36.2 percent.
NWR said final pricing is expected to be announced on or before May 7, with dealing expected in London the following day, in Prague on May 9 and in Warsaw on May 14.
NWR is owned by RPG Industries SE, which has four shareholders including Bakala and Crossroads Capital Investments, each with 40.5 percent stakes, along with private equity firm First Reserve, with 14.25 percent, and private group American Metals and Coal International (LSE: CLN.L - news) , holding a 4.75 percent share in RPG.
NWR, which is registered in the Netherlands but owns the Czech Republic's largest hard coal mines OKD, saw a 94 percent jump in 2007 net profit to 196 million euros as revenues grew 10 percent to 1.37 billion euros.
The group wants to use around 200 million euros from the issue of new shares for two mining projects in Poland, as well as existing sites in the Czech Republic.
NWR in March applied for a mining licence in Debiensko, which it expects to receive in several months.
Last year, the group signed a letter of intent with Poland's Jastrzebska Spolka Weglowa (JSW) to co-operate on the development of mining operations in Morcinek, which is along the Czech-Polish border.
The group is also eyeing privatisation of mining assets in Poland, where the government on Tuesday unveiled a 4-year privatisation plan.
'The government is now moving toward a resolution of some of the issues hindering privatisation in the past,' Bakala said.
He said the government has a 'credible' plan which could start the privatisation process as early as this year.
Demand is rising for hard coal, which can be used in power generation and the manufacture of iron and steel, mainly due to Asian demand.
'The company is uniquely positioned to benefit from burgeoning demand in central Europe driven by sustained growth in the steel industry,' Bakala said in a statement earlier.
NWR's main asset OKD supplies to customers such as ArcelorMittal (Amsterdam: NSCNL0001MT7.AS - news) 's Czech unit, U.S. Steel, Dalkia CR and the region's largest power producer CEZ.
NWR in 2007 sold 13.1 million tonnes of coal, most of which was coking coal. As of Jan 1, the company said it had an estimated 419 million tonnes of proven and probable reserves on a joint ore reserves committee basis.
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