STOCKHOLM, May 30 (Reuters) - The chairman of Sweden’s state-owned LKAB, one of the world’s top iron ore producers, believes the firm would benefit from a partial privatisation and an initial public offering, a Swedish daily reported.
“It would be easier to bring in new capital through a rights issue, and the company would not need to maintain a high unproductive level of cash,” Bjorn Sprangare told business daily Dagens Industri in an interview.
Sprangare said LKAB, the world’s eleventh biggest producer of iron ore, could benefit in the same way that Brazilian mining company Vale (VALE.N)VALE5.SA did after its own partial privatisation.
Vale, the world’s biggest producer of iron ore, has grown immensely since its listing, he said.
“LKAB is working with a too high cash requirement, which is encouraging wastefulness,” he said, referring to the government principle of maintaining a high level of cash reserves to prepare for future downturns.
Elected in 2006, the government then embarked on Sweden’s biggest ever privatisation programme, including selling Absolut Vodka maker Vin & Sprit (PERP.PA), real estate firm Vasakronan and part of telecoms firm TeliaSonera.
Sweden has holdings in around 50 firms, including a near 20 percent stake in the Nordic region’s biggest bank, Nordea NDA.ST.