Deutsche, Goldman win plum Mongolia IPO roles
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Deutsche, Goldman win plum Mongolia IPO roles

Share giveaway might prompt baby boom; Crucial strategic investor role to be decided soon

Deutsche Bank and Goldman Sachs have been chosen as joint sponsors and lead managers for the IPO of Erdenes Tavan Tolgoi, the Mongolian coking coal asset whose flotation is expected to transform the country’s economy at a stroke. As Euromoney reported last month, the two banks were chosen alongside BNP Paribas and Macquarie to work on the deal after fierce pitching that involved almost all of the world’s leading investment banks. The latter two banks will act as selling agents, a more junior role. Erdenes TT chief executive B Enebish has told local media that the banks had already begun working on the deal, according to Dale Choi, an analyst at Frontier Securities in Ulaan Baatar.

Initial speculation suggested the deal might raise about $2 billion but sources are now saying that the total could be closer to $5 billion. Although the deal could transform the lives of Mongolia’s people, rocketing the country up the GDP per capita rankings, some sources in Ulaan Baatar worry that well-intentioned plans to distribute some of the proceeds from the deal could run into trouble. Mongolia’s government plans to sell about 10% of the deal at a reduced rate to local professional investors, as well as give away 10% to Mongolian citizens.

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