Shelf Drilling pulls $500m IPO plan after investors get cold feet

Shelf Drilling no longer plans to float on the London Stock Exchange (Source: Getty)

Oil-rig contractor Shelf Drilling is to pull its plan to float on the London Stock Exchange, citing insufficient interest to justify proceeding with the sale.

Sources close to the deal told City AM that the decision was made late Tuesday to cancel the initial public offering, which was set to raise at least $500m (£297m), despite some interest in the shares. The company and its advisors are understood to be working on a statement.

The news marks the latest in a run of failed IPOs including high-profile companies Fat Face and Wizz Air. Investors are becoming increasingly picky as companies announce intentions to float in ever growing numbers. Recent disappointments Saga and Card Factory, whose shares are both trading below issue price, have also acted as warnings to those who sign the cheques.

Dubai-based Shelf Drilling was understood to have planned on repaying a portion of a $350m loan with the proceeds from the now-pulled sale. The company is chaired by Sir Richard Olver, previous chairman of BAE systems and a former director of oil heavyweight BP. It posted adjusted revenues of $1.2bn last year.

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