Canadian steel maker Stelco Holdings Inc's planned IPO could be a tough sell as it faces the twin headwinds of slowing North American auto sales and the uncertain impact of trade talks, even as it looks to cash in on a rebound in steel prices. Stelco also needs to regain investor confidence just months after emerging from its second bankruptcy in 13 years, analysts and investors said, as its new owner seeks to raise $150 million by selling a stake in the restructured, almost debt-free company.
Stelco, now owned by US private equity group Bedrock Industries, filed in late September for the initial public offering and is now marketing it. If the effort is successful, it would be the world's biggest steel IPO since 2010, when Indonesia's Krakatau Steel raised $300 million in its offering, according to Thomson Reuters data. Krakatau's stock has nearly halved since then.
While global steel prices have jumped 160 percent since end-2015 as China, both the world's top steel producer and consumer, shut capacity in an environmental crackdown, sales of North American automobiles have been mostly weak this year.