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(Bloomberg) — Glencore Plc, Mercuria Energy Group and Trafigura Group are among key investors planning to buy securities in the Hong Kong listing of Indonesian gold miner PT Merdeka Gold Resources.
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The commodity-trading giants are participating as cornerstone investors, which get guaranteed allocation in a deal in exchange for holding their allocations for a period of time, Merdeka Gold said in its listing document, confirming an earlier Bloomberg News report.
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The Jakarta-listed company started taking investor orders Wednesday for a listing from which selling shareholders may raise as much as HK$2.4 billion ($305 million), according to its listing document. The sellers include individuals connected to the company’s parent PT Merdeka Copper Gold.
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The sellers are offering 89.7 million Hong Kong depositary receipts at as much as HK$26.60 each. Often called HDRs, the instruments are coming to market for the first time since clothing brand Uniqlo’s owner Fast Retailing Co. offered them in 2014. The listing would test investor appetite for the securities as well as for non-Chinese companies, with some prospective issuers closely tracking its success as they weigh their options.
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The company previously considered at least $500 million in proceeds, with people familiar with the matter saying the deal size would ultimately depending on gold prices. While gold prices have more than doubled over the past three years, prices have shifted lower this year after the Middle East conflict lifted energy costs and fueled bets that interest rates will need to stay higher for longer, dimming the appeal of non-yielding bullion.
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The Hong Kong exchange in 2008 introduced HDRs, which represent underlying shares, as an alternative listing route for companies from markets that prohibit share issuance or the maintenance of a share register abroad. After an initial wave of listings, interest gradually faded as trading volumes declined and several companies delisted, including Coach parent Tapestry Inc. and Glencore.
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Merdeka Gold plans to list in Hong Kong on June 26. Its shares have more than doubled since the its stock-market debut last September, giving the company a market capitalization of $5.6 billion. The company said listing in Hong Kong would strengthen its capital-market platform and enhance its international profile.
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The company is also doing the deal at a time when global investors have rapidly lost confidence in Indonesia. The commodity-rich nation’s stocks have tumbled, and index compiler MSCI Inc. earlier this year said the country could be downgraded to frontier status from emerging market.
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UBS Group AG, Citic Securities Co., Morgan Stanley and HSBC Holdings Plc are arranging the Merdeka Gold listing.
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(Updates with confirmation of investors in the offering and the deal’s details. An earlier version corrected the description of the securities and the deal’s structure.)
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