China's SDIC puts off London listing plan

December 05, 2019 09:48
London has seen a sharp drop in stock market fundraising this year amid the Brexit uncertainty. Photo: Reuters

Chinese power generation company SDIC has put off plans for an offering of global depositary receipts (GDRs) in London, citing market conditions, Reuters reports.

SDIC, which was set to become the second Chinese company to make use of the Shanghai-London Stock Connect scheme, was quoted as saying that it will not go ahead with the listing, for now.

The Beijing-based firm was preparing to list GDRs worth about 10 percent of its market capitalization, which would have put the deal size at around US$830 million.

"The company believes this is a prudent decision and is in the best interests of its existing and future shareholders," it said in a statement.

The news crowns what has been a disappointing year for stock fundraisings globally, and in Europe in particular, Reuters noted.

Overall, the number of initial public offerings in London has halved this year so far, with just US$4.82 billion of deals getting over the line - the lowest volume since 2009 in the aftermath of the financial crisis, according to the report.

No British firm has attempted an IPO since the summer amid Brexit uncertainty.

SDIC's postponement is also a blow to Britain’s bid to cement ties with China, as it looks to build relationships with non-European countries to prepare for life outside of the European Union.

A source close to the transaction, however, told Reuters that SDIC's move should be seen as a postponement rather than a cancellation.

The deal could return "relatively quickly", perhaps even early 2020, the source suggested.

-- Contact us at [email protected]

RC