ERM Annual Review 2008 - (Page 14) Listing on the Stock Exchange In Eurasia, several extractive-based companies are consolidating their operations by floating on the London Stock Exchange. This process requires rigorous EHS due diligence as part of the Initial Public Offering (IPO) prospectus and listing documentation. ERM conducted an EHS due diligence assessment of 27 mining and production sites, power plants and logistic operations for the Kazakhstan-based Eurasian Natural Resources Corporation (ENRC). This work was carried out in conjunction with legal, accounting and technical due diligence teams assisting in the preparation for listing on the London Stock Exchange. ERM developed the EHS sections for ENRC’s IPO prospectus, which culminated in the successful completion of the IPO and entry into the FTSE 100. A successful listing provides companies with far-reaching benefits. The stringent EHS due diligence process completed during a listing is often made against international best practice requirements, putting listed organizations in a good position to secure financing in the future. Activity in Emerging Markets To meet commodity demand, transaction activity has been concentrated in emerging markets, such as Brazil, Russia, India and China (BRIC), Africa and the Middle East. On the one hand, US and European-based companies are entering these markets such as Anglo American’s acquisitions in Brazil, for which we provided due diligence support. On the other hand, BRIC, African and Middle Eastern companies, including state-owned sovereign wealth funds, are emerging well-financed and eager to capitalize on growth in the commodity markets. These companies must also address EHS regulatory and reputational pressures, and understand the timing of EHS costs in what are often new regulatory contexts. The Changing Face of Property Markets Emerging markets are not only providing opportunities in the commodity sectors. As the credit crunch continues, an increasing number of property opportunities and projects are emerging in Southern and Eastern Europe, Africa and India. During 2007, we undertook an environmental and technical due diligence assessment for Arqaam Capital, an investment firm based in Dubai and London, across a portfolio of eight large waterfront development sites for a tourism development platform established under AC Croatia Limited. Mitsubishi Corporation Conducting environmental and key health and safety due diligence for an oil field in the North Sea. Takeyuki Nakagawa Yokohama, Japan Nick Biagetti, Manchester, UK Anglo American Assessing permitting processes and the potential implications on the project schedule for an iron ore acquisition in Brazil. Earlier this year, Anglo American completed the acquisition of Minas-Rio and took a 70% interest in MMX Amapá, two iron ore projects in Brazil. The transaction was completed in two phases worth US$1.15 billion and US$5.5 billion respectively. ERM completed the due diligence for both these deals. As the deals drew to a close, ERM also assessed the environmental licensing process for factors that could affect Minas-Rio’s implementation schedule and start-up, and thus result in potential financial implications. Carolina Retamal, Sao Paulo, Brazil 14 ERM Annual Review 2008
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