The company said last Friday July 11th that it had decided to abandon its initial public offering due to “the lack of conditions to conclude in a satisfactory manner the listing because of unfavorable domestic and international stock markets” (download here the press release). The day before Italian pharmaceutical group Rottapharm pulled its ipo for the same reason (see a previous post of BeBeez).
The decision of both companies highlights tensions in the stock markets, especially in Europe, which culminated on Thursday when investors dumped European and U.S. shares after it emerged that the parent company of Portuguese lender Banco Espírito Santo had delayed coupon payments relating to some short-term debt securities. Another reason it a too crowded ipos market: in the last few months many companies listed on the European stock exchanges and now investors are quite selective and in this quite competitie situation can easlly ask for lower valuations.
Sisal’s story wasn’t an easy one to be told to international investors. Actually this year Sisal will rgister a loss again after three years of losses ( 99 millions in 2013, 38.8 millions in 2012 and 29.5 millions in 2011) due to non-recurring items especially expenses deriving from sanctions levied by regulatory entities (see a previous post of BeBeez). Thanks to ipo proceeds, however, net financial debt would have dropped a lot resulting in much lower interest rates expenses which in turn would have allowed the company to restart on different basis and be profitable in 2015.