German wind turbine maker Senvion on Wednesday cancelled its share sale on the Frankfurt stock exchange planned for March 18 after failing to attract sufficient investor demand. "Against the background of recent market volatility, Senvion and its shareholders Centerbridge and Arpwood have decided not to pursue a private placement and listing of shares," Senvion said in a statement.
A person familiar with the deal said while readings of volatility indices such as the VIX and the VStoxx were low enough to pull off an initial public offering (IPO), markets were still jittery. "You have to take the general nervousness of markets over the last couple of weeks into account, the DAX going up 2.5 percent and then closing down 2.5 percent after the ECB announcement last week," the person said. "Investors have so much on their plate already that they shy away from buying something they don't know yet and where they have a tough time assessing the risk," the person said.
Another person familiar with the deal said that investors see Senvion facing competition in Western markets from the likes of Nordex and Gamesa. Senvion, formerly known as Repower, also lacked a track record for making money in emerging markets, where it was barred from doing business by its former owner Suzlon, which sold the company to Centerbridge last year, the source said. A corruption investigation into Senvion Chief Executive Juergen Geissinger had also weighed on investors' willingness to order shares, the sources said.
Centerbridge and its co-investor had offered shares worth as much as 703 million euros ($779 million), targeting a market value of Senvion of up to 1.53 billion euros. No new shares were on offer, meaning Senvion would not have raised any money from the sale. An aim of the share sale was to demonstrate that the company had severed ties with highly leveraged Suzlon.
Comments
Comments are closed.