Viva Aerobus postpones IPO amid tough markets
The Mexican low-cost airline held back on its listing, while Bancolombia is hoping for more success with its equity follow-on sale
Mexican airline Viva Aerobus postponed its initial public
offering on Tuesday, citing bad markets after struggling to get
enthusiasm from investors.
The decision makes it the third company in two weeks to hold
off on issuing equity in public markets, following similar
calls on an IPO for
Office Depot de México and a follow-on for
Brazil's Fras-le last week.
"While we received significant interest from potential
investors, the continued market volatility is not an optimal
condition for an IPO," Juan Carlos Zuazua, VivaAerobus's chief
executive said in a statement.
Still, others continued to hope for better conditions.
Bancolombia opened books on its follow-on sale of 110m
preference shares on Monday, a deal that could raise as much as
COP2.55tn ($1.24bn) if it comes at the upper range of
Brazilian telecom Oi is also hoping to raise capital in the
coming months, and is taking a cautious approach. It said
this week that its capital raise, a precondition for merging
with Portugal Telecom, would be backstopped by the lead
Meanwhile, Viva Aerobus would keep looking at the market for
an opportunity to resume the deal, Zuazua added. The
low-cost flyer could have raised as much as MXN2.8bn ($210m) if
its IPO had been priced at the top of the range.
"Even pricing at the low end of the range would be heroic in
this market," said a banker following the deal.
Latin equity markets have suffered in recent weeks, with
Mexico's IPC index falling 4.6% since the end of 2013.
Investors have pulled over $18.59bn from emerging market equity
funds this year, and $1.78bn from LatAm-specific funds.