16th Jun 2014 14:20
LONDON (Alliance News) - Low-cost airline Wizz Air Holdings PLC Monday pulled its planned initial public offering in London, blaming the recent volatility in airline stocks, but four other companies added themselves to the London IPO pipeline.
European airline stocks have come under pressure in recent weeks, following profit warnings from the likes of Deutsche Lufthansa AG and Aer Lingus PLC, and as the growing crisis in Iraq pushes up oil prices, and hence the price of jet fuel.
"Despite the positive response to our business story and the company's growth opportunities and prospects within the institutional investment community, Wizz Air today announces that the company has decided not to proceed with an IPO at this stage, due to the current market volatility in the airline sector," the company said in a statement.
"The outlook for Wizz Air's business remains extremely positive and unaffected by the decision not to proceed with an IPO; the board will continue to focus on executing its strategy of driving growth and value," it added.
Wizz Air is the fourth company to postpone or cancel a planned IPO in London in 2014. Last month, fashion retailer Fat Face Group Ltd pulled out of its UK stock market debut, citing weak conditions in the UK equity market as the main reason for backing out.
The IPO market got off to a strong start in 2014, but several new listings have struggled since April as fears were raised that valuations were getting too lofty.
Mysale Group PLC, the online retailer part owned by the wife of UK retailer Philip Green, saw its shares slide below its IPO price as dealings got underway on AIM Monday. The company had priced its IPO at 226 pence, giving it an initial market capitalisation of about GBP340 million, but was trading at 182 pence Monday afternoon.
The IPO raised MySale GBP40 million, which it will use for marketing in its new markets in the US and UK, to make potential acquisitions, automate its existing warehouses, and for working capital.
However, in a positive development, Empiric Student Property PLC, the student accommodation company which on May 13 said that it intended to raise more than GBP110.0 million before expenses in an IPO on the London main market, said in its prospectus that it now intends to raise GBP150.0 million.
The London IPO pipeline was bolstered Monday by African construction services company Mota-Engil Africa, satellite technology company Global Invacom Group Ltd and biopharmaceuticals technology company Abzena Ltd, which is a portfolio company of Imperial Innovations Group PLC, as well as equipment lease and asset finance investor SQN Asset Finance Income Fund Ltd.
Mota-Engil Africa said it intends to list on the main market in London on June 20, using the money raised to expand its engineering and construction activities in sub-Saharan Africa, and to diversify its operations and increase the orders it gets from private customers.
The company helps build everything from roads and bridges to ports, water treatment plants and real estate. It currently operates in Angola, Malawi, Mozambique, Cape Verde, Ghana, São Tomé and Príncipe, South Africa, Uganda, Zambia and Zimbabwe.
Its order backlog stood at EUR1.7 billion at the end of March across more than 80 projects. In 2013, it posted revenue of EUR1.0 billion and adjusted earnings before interest, tax, depreciation and amortisation of EUR243 million.
Abzena, which used to be known as PolyTherics, said it intends to list on AIM in July. It will use the money it raises to increase service capacity to meet demand growth, enhance the license revenue opportunities for its existing technologies, and develop new technologies.
It booked revenue of GBP5.8 million in its last financial year.
In a separate statement, Imperial Innovations said it currently has a 26.2% interest in Abzena before any fund raising. Its holding was valued at GBP11.1 million at the end of January, making it the group's fourth largest portfolio company by value.
Global Invacom, which is currently listed in Singapore, also intends to list on AIM, on June 27, raising up to USD10 million.
The company, which makes satellite dishes, low noise block, satellite TV, cable peripherals and precision waveguide for a number of clients, posted revenue of USD115.8 million in 2013, up from USD62.9 million in 2009, and pretax profit of USD9.3 million, up from USD5.0 million.
SQN Asset Finance Income Fund said it intends to raise up to GBP150.0 million in an IPO on the main market, with up to GBP100.0 million more to be raised in a placing following admission.
The company will invest the proceeds in equipment lease and asset finance arrangements across a range of assets and industries, predominantly in the UK and the US.
By Steve McGrath and Samuel Agini; [email protected]; @SteveMcGrath1
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