Konkola is now expected to list in the first quarter of next

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Konkola is now expected to list in the first quarter of nex
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Vedanta subsidiary delays $1.1bn listing

By William MacNamara

Published: November 30 2010 22:23 | Last updated: November 30 2010 22:23

Shaky markets have disrupted the planned December flotation of Konkola Resources, an African subsidiary of India’s Vedanta that was planning to raise $1.1bn (£706m).

Konkola, a Zambian copper-mining operation, pulled the plug on its listing on Tuesday after only two days of marketing to London investors.
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It became clear to the company’s management that fears over the consequences of Ireland’s financial crisis were damping investor sentiment.

“The boards of Vedanta Resources and Konkola have decided to pursue such a listing in 2011,” Vedanta said.

The fundraising would have helped Vedanta pay for a deal to buy a controlling stake in Cairn India, the oil explorer. But the completion of that deal now looks like it has also been pushed in to the new year, relaxing pressure on Konkola to free cash.

On November 19 Vedanta secured $6bn in acquisition funds from a consortium of banks, helping it on its way to paying the expected $8.5bn to $9.6bn price for Cairn India.

“Vedanta should get more for Konkola if there is a delay,” said Michael Rawlinson, of Liberum Capital in London, citing projects such as the Konkola Deep mine, whose expected completion next year stands to boost the company’s value ahead of any flotation.

Konkola is now expected to list in the first quarter of next year.

If it meets this timing it will join Severstal Gold, a planned spin-off of the precious metals assets of Russia’s Severstal Resources. Both could enter the FTSE 100 index.

Vedanta shares fell 24p to £19.86.