Cobalt Holdings drops London IPO plans

Metals investor Cobalt Holdings has dropped plans to list this month on the London Stock Exchange, cancelling what would’ve been that market’s biggest initial public offering in mining since 2018.

On Wednesday, UK-based Cobalt Holdings didn’t give reasons for the U-turn after pricing its shares at $2.56 each last week, aiming to raise as much as $230 million. However, sources cited by Reuters have indicated that the process was halted due to a lack of investor demand.

The company, which buys and stores physical cobalt, had intended to use most of the funds to buy 6,000 tonnes of physical cobalt, or about a third of this year’s projected global surplus, from Glencore (LSE: GLEN) at a discount.

The global mining and trading firm was to take a 10% stake in Cobalt Holdings. New York-based investment firm Anchorage Capital was expected to acquire a 9.5% stake, committing to supply up to 1,500 tonnes of cobalt in 2031.

Turnaround? 

Jake Greenberg, head of Cobalt Holdings, is betting on a market turnaround for the battery metal after the world’s leading producer, the Democratic Republic of Congo, imposed export limits this year to lift prices. Physical cobalt offers investors direct exposure to the battery metal without the risks associated with mining operations, he maintains. 

The IPO, would have boosted London’s struggling equity markets. Auditing giant EY reported that 88 companies delisted or transferred their primary listing from London’s main market last year, the highest number since 2009. The offering would have been London’s biggest in mining since Kazatomprom (LSE: KAP), the world’s largest uranium producer, based in Kazakhstan, entered the market in November 2018. 

Ithaca Energy (LSE: ITH), an oil gas company focused on the North Sea, raised $300 million in a late 2022 initial public offering.