Vancouver-based SouthGobi Energy Resources Ltd. (TSX:SGQ) has raised nearly half a billion dollars from an international public equity offering that closed Friday.
The company raised $459 million from the sale of 27 million common shares at a price of $17 per share. The company had planned about 85% of its offering to be issued through a new listing on the Hong Kong Stock Exchange and private investment from international investors.
The remainder was raised in Canada.
Bloomberg had reported in mid-January that SouthGobi had raised $50 million each from China Investment Corp., the sovereign wealth fund of the People's Republic of China, and Temasek Holdings Pte, Singapore's government-owned investment company.
SouthGobi had said funds raised would be used to expand production at its Ovoot Tolgoi coal mine, develop roads and a railway to the mine and expand the company's exploration in the region.
Citigroup Global Markets Asia Ltd. and Macquarie Capital Securities Ltd. jointly co-ordinated and led the global offering. They also conducted the Canadian offering with Genuity Capital Markets and Salman Partners Inc.
The underwriters were granted the option to buy an additional four million shares at $17 each. If the underwriters exercise their option, total gross proceeds would increase to $527.8 million.
Despite strong interest in the share offering, SouthGobi's shares fell 11% in its Hong Kong debut, to $15.30 (HK$112) from $17 (HK$126.04).
The decline was due primarily to continued weakness in the global market over concerns about further monetary tightening in China and slower than expected economic recovery in the U.S.
SouthGobi's share price range on the TSX during the past week: between $17.37 and $18.07; 52-week high: $20.39; 52-week low: $7.