RAG chems IPO closer after coal foundation nod

11 July 2007 17:48  [Source: ICIS news]

LONDON (ICIS news)--German district government approval of RAG’s plans for a foundation to manage coal mine closures had taken it a step further towards the spin-off of its chemicals, energy and real estate assets, the coal-to-chemicals group said on Wednesday.

The Düsseldorf District Government approved RAG Beteiligungs-AG's application to establish the RAG-Stiftung coal foundation on 10 July.

“In establishing the RAG-Stiftung, we have reached a further milestone on the path being taken by RAG Beteiligungs-AG (chemicals, energy, real estate) towards capital markets,” said RAG chairman Werner Muller.

“At the same time it brings us much closer to ensuring that the adaptation process of the German hard coal mining sector up to the year 2018 can be effected in a socially compatible manner,” he added.

RAG still expects a first half 2008 initial public offering (IPO) for RAG Beteiligungs-AG, or NewCo.

The RAG Stiftung foundation will manage the spin-off and mine closures in a plan backed by the German federal and regional governments to be reviewed in 2012.

Third-party investment in NewCo, however, remained a possibility, RAG said.

Such investment was in line with the intentions of the foundation which will use the proceeds from the capitalisation of RAG Beteiligungs-AG to finance hard coal mining liabilities for an unlimited period, it added.

RAG’s Degussa chemicals business had attracted attention from chemicals maker Lanxess and private equity. A minority stake in NewCo, however, is likely to be more attractive to a financial rather than an industrial investor.

By: Nigel Davis
+44 20 8652 3214

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