The "Financial Times" reports that Beny Steinmetz has confirmed that he wants to float his Sierra Leone diamond mine company, Octea, on the Hong Kong Stock Exchange at a company value of $2-3 billion. BSG Resources Ltd. spun off Octea, the holding company of Koidu Holdings SA with the goal of raising $400-600 million in an IPO.
Steinmetz told the "Financial Times" that there was a "good possibility" that the Koidu mine would hold an IPO in the second half of 2012. The mine is expected to produce 500,000 carats of diamonds this year.
The "Financial Times" says, "Octea is the latest example of how diamond producers are trying to capitalize on rising demand from Asia amid declining diamond supplies." It added that, in November 2011, Anglo American plc (LSE: AAL, JSE: ANGLO) agreed to a $5.1 billion takeover of de Beers SA, and Russia's Alrosa has also taken steps toward an IPO.
If Steimetz succeeds in floating Octea, it will be the first diamond mine to go public in Asia. He told the "Financial Times" that Octea could achieve an "in-between valuation" straddling a luxury goods multiple and a mining company multiple. The company will use the proceeds to develop a new mine in Sierra Leone, with the long-term goal of producing 2.5 million carats of diamonds a year.
The "Financial Times" noted that this would be Steinmetz's first return to the capital market after selling Katanga Mining Ltd. (TSX: KAT) to Switzerland's Glencore International plc (LSE: GLEN, HKSE: 0805) in the wake of the global financial crisis.
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