LONDON (Alliance News) - Shallow water offshore drilling contractor Shelf Drilling Ltd Wednesday became the third company in recent weeks to blame challenging conditions for new listings for pulling its plans for an initial public offering in London.
The London IPO market was buoyant in the second half of 2013 and the first quarter of this year after several years in the doldrums in the wake of the financial crisis. However, the IPO markets started to show signs of investor reluctance in April after some IPOs in both the US and UK performed poorly after being accused of being over-valued, and as the equity markets in general stalled after a strong run.
Some London IPOs are still getting off to a strong start, but others are being scaled back to ensure they get off the ground, or performing poorly in the weeks after the initial offering. Shelf Drilling's decision to pull its IPO due to challenging markets comes after student accommodation provider Liberty Living PLC last week cited the same cause for pulling its planned IPO. And in May, fashion retailer Fat Face Group Ltd pulled out of its UK stock market debut, also citing weak conditions in the UK equity market as the main reason for backing out.
Last month, low-cost airline Wizz Air cancelled its planned IPO in London, although it blamed volatility specifically in the aerospace sector after the Iraq crisis pushed up fuel prices and Deutsche Lufthansa issued an unrelated profit warning.
However, satellite technology company Global Invacom Group Wednesday saw its shares rise very slightly after its IPO on London's AIM market, which had to be increased to meet investor demand.
It raised GBP11.8 million before expenses in total in an oversubscribed placing at 19.75 pence a share. However, the stock was trading at 20 pence in early dealings.
The IPO raised GBP8.8 million for the company and GBP3.0 million for the selling shareholders. The IPO price gave the company an initial market capitalisation of GBP55.8 million.
Newly incorporated closed-ended investment company Urban Exposure Real Estate PLC added itself to the London IPO pipeline Wednesday, saying it intends to raise gross proceeds of GBP500 million by listing on the London Stock Exchange's main market at GBP10 a share.
It intends to invest in secured, residential-led real estate development project loans, with a primary focus on projects in London and the south east of England.
Meanwhile, payments processing company Planet Payment Inc, which is listed on both AIM and the Nasdaq, said it will cancel its AIM listing effective August 18 as the bulk of trading in its shares is done on the US exchange and cancelling the dual listing will reduce costs.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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