The Middle East turmoil has claimed its first high-profile victim on Hong Kong's capital markets.
Russian oligarch Oleg Deripaska's electricity supplier Eurosibenergo has shelved its US$1.2 billon Hong Kong initial public offering after Middle Eastern sovereign wealth funds that planned to buy into the deal pulled back at the 11th hour, people involved in the transaction said.
'The problems in the Middle East mean people we are in talks with there may take longer to make a decision,' someone working on the Eurosibenergo deal said. Another insisted Eurosibenergo was still in 'advanced talks with potential cornerstone investors', in the Middle East and China. But, he added, political turmoil in the Arab world meant those talks were 'going to take longer.'
Eurosibenergo, which owns hydropower plants in Siberia, was due to start its IPO roadshow this coming Monday. Its bankers put the brakes on late on Thursday evening.
Deripaska, 42, has consistently targeted Hong Kong as a money-raising venue for parts of his sprawling resources empire but has been dogged by disappointments and delays.
This is the second time Eurosibenergo has postponed its flotation. The company has been targeting Middle Eastern government funds after a lacklustre response from Chinese investors first time round, though mainland utilities company China Yangtze Power has signed up buy US$168 million worth of shares.
