Brazil Miner Plots London Listing

Brazilian miner Ferrous Resources hopes to get $300m-$400m from a London IPO, its CFO tells LatinFinance. The Minas Gerais-based iron ore miner expects to list by the end of June and eventually reach a 25% float. Simao says the IPO would be the first by a Brazilian on London’s big board and that the company could be a candidate for inclusion in the FTSE 250. JPMorgan Cazenove, Deutsche Bank and Morgan Stanley are managing the transaction, for which an exact timetable has not been set. “We decided from the beginning that a London IPO would be a central part of our plan, not only to guarantee our shareholders adequate governance standards, but also adequate visibility and liquidity,” CFO Andre Simao tells LatinFinance. He notes that the company was ready in September 2008, but had to delay launch due to the global crisis. Simao says Ferrous raised $1.3bn through 3 private placements to hedge funds, family offices and other private investors in 2007 (at $0.50 per share) and a fourth in 2008 (at $4.50). IPO proceeds will cover Ferrous’ next expansion project, which includes development of Viga in Minas Gerais, as well as a slurry pipeline and port in Espirito Santo. Total cost of the project, to be completed in 2013, is estimated at $3bn, according to regulatory documents. The company hopes it can achieve integration that will eventually boost its value. Simao says that once listed, Ferrous could comp against Australia’s Fortescue and Bermuda-based African Minerals. Ferrous suffered a loss of $25.6m in H1 2009, the most recent period for which it published a financial statement. The miner was founded in 2007. It has 4 projects in Minas Gerais’ Iron Quadrangle and 1 in Bahia.