CHINA’S second-largest wind turbine maker, Xinjiang Goldwind Science & Technology, has pulled its up-to-$1.2bn (£814m) initial public offering, the fifth Hong Kong IPO shelved since last month.
With around $3.8bn in public offerings pulled from the Hong Kong Stock Exchange in the last few weeks, the dead deals reveal the impact of the sharp drop in China’s stock markets and the global fears surrounding the Eurozone debt crisis.
The pile of discarded IPOs are crushing investor sentiment ahead of the Agricultural Bank of China’s mid-July deal, a deal that could exceed $22bn and be the largest IPO ever.
A source, who was directly involved with the deal but unauthorised to speak publicly on the matter, said the retail portion of Goldwind’s IPO was under-subscribed.
Goldwind planned to offer 395.3bn shares, or 15 per cent of the company, with an indicative price range of HK$19.8 (£1.72) to HK$23 per share.
Last month, Russia’s Strikeforce Mining & Resources and China Tian Yuan Mining were among the deals yanked from the IPO process, with Swire Pacific’s property arm shelving its $2.7bn IPO plan on 6 May.
Goldwind’s trading debut was originally set for 22 June, under the symbol “2208”. CICC, Citigroup and Credit Suisse were handling the deal.
China’s Shanghai benchmark stock index is one of the world’s worst performers this year, falling 22 per cent since the government introduced measures to cool property prices in mid-April.
That, coupled with the euro sovereign debt crisis, has weighed on the initial public offering market in Hong Kong, which was home to the most IPOs globally last year.
The Agricultural Bank of China began its premarketing period yesterday, at a time when the market is digesting yet another pulled IPO.
Flotations have also been pulled in London. New Look, Travelport and Merline Entertainments cancelled IPOs earlier this year.
City A.M. Reporter