New Century Shipbuilding scraps US$481 million IPO in Singapore

NEW Century Shipbuilding, a Chinese shipbuilding group based near Zhangjiagang on the Yangtze, has cancelled a S$666 million (US$481 million) initial public offering in Singapore.
This comes as the group scaled down the listing from an initial target of up to S$1.5 billion, reports London`s Financial Times, which points out the IPO would have given New Century a market value of S$5.31 billion.
New Century did not give a reason for the withdrawal. However, it said in a statement that it "intends to review the situation" and consider re-launching the listing in the "near future," the report said.
"The shipbuilding industry, which is dominated by yards in South Korea, China and Japan, has been in turmoil since 2008 due to overcapacity and a collapse in orders. As a result, many shipbuilders have had to scale down their ambitions to raise funds in the capital markets," according to the FT.
It maintains that the decision by New Century to pull its IPO will be a disappointment to the Singapore Exchange, which had recently claimed to have a "strong pipeline" of Chinese offerings in prospect once New Century Shipbuilding`s capital raising had taken place.
"Looking at the mandates that have been awarded to the investment banks I am quite heartened to see that it is a very good mix of overseas companies," Gan Seow Ann, head of markets at the Singapore Exchange, was quoted as saying in an interview with the Financial Times days before the pullout.
The Singapore Exchange has a total of 303 overseas listings, including 155 from mainland China, representing almost double 2005`s total of 85. There have been 12 Chinese listings so far this year out of a total of 35 IPOs, the report added.