IPO OF "ERDENES TAVAN TOLGOI" POSTPONED AGAIN

Ulaanbaatar, Mongolia /MONTSAME/ An initial public offering (IPO) for the state-owned “Erdenes Tavantolgoi” company has been postponed. It was said on Tuesday by Graeme Hancock, the Chief Operating Officer of the company, at Mongolia Investment Summit which ran October 30-31 in Hong Kong. Mr Hancock explained that the company's planned $3 billion Hong Kong, London and Ulaanbaatar IPO is unlikely to be held before the end of the third quarter because of poor market conditions and weak coal prices. The IPO has been delayed several times. In early September, the company said the date had been pushed back by three months to the second quarter of 2013. As Hancock says, another reason for the delay in listing the company's shares is that a new Mongolian securities law needed to establish the necessary legal framework for the company to list in the three cities still had not been approved. The company has the rights to develop the Tavan tolgoi coal reserves in Omnogobi aimag. Mongolia's government "needs foreign investors to help it develop huge but largely unexploited mineral resources including coal and copper, however, to do this, it needs navigate between its powerful northern neighbor Russia and resources-hungry China to the south". "At present, the Hong Kong stock exchange does not allow Mongolian entities to list," Mr Hancock added. Once the law had been approved by Mongolia's parliament, there would be a regulatory environment much more acceptable to the Hong Kong stock exchange, he said. "This is what we are waiting for." The chief executive of the Mongolian Stock Exchange (MSE) Khangai said the new law has been submitted to parliament and that he hopes it will be passed within several months. "The adoption of new securities law will allow dual listings of international and Mongolian companies. This law is truly the opening of the gateway to create an international market," Mr Khangai said. The proposed law seeks to reduce the burden on companies seeking to make a secondary listing by removing the need for registration in Mongolia and the need for compliance with both Mongolian and home-country securities legislation. B.Khuder