Vedanta Resources, the London-listed Indian miner, has postponed the initial public offering (IPO) of its Zambian copper business, Konkola Copper Mines (KCM), until next year. The decision was attributed to significant stock market volatility, particularly in the wake of the Irish debt crisis which created renewed financial market turbulence. Sources close to the deal had initially anticipated final pricing for mid-December, with the listing expected in the upcoming month, but the company confirmed the delay yesterday. This marks the first significant European IPO to be impacted by the recent market instability.
The initial plan was to list KCM, Africa's second-largest integrated copper producer, to raise approximately $1.1 billion (£710 million) through new and existing share sales. This capital was intended to boost KCM's output. Kishore Kumar, CEO of KCM's holding company Konkola Resources, had previously indicated a December listing. The boards of Vedanta Resources and Konkola collectively decided to pursue the listing in 2011, noting that with the year-end approaching, there wouldn't be sufficient time to complete the usual month-long IPO process and allow shares to trade properly before the Christmas break.
The announcement led to a sharp drop in Vedanta's shares, although they recovered some losses to close 1.2 percent lower at 1,986 pence. This delay comes after a period of relative resurgence in European offerings during October and early November, buoyed by stock markets trading at two-year highs. However, concerns regarding Eurozone debt, exacerbated by Ireland's bailout, subsequently increased market turbulence, ultimately contributing to Vedanta's decision to push back the IPO.
