Singapore’s Universal Terminal, partly owned by China’s oil giant PetroChina, has postponed its $800 million business trust initial public offering (IPO) for its storage terminals, due to weak market conditions, a media report said.
This marks the second instance within a month that a major IPO had to be deferred and is bound to further rattle investors’ confidence.
Universal Terminal is now planning a listing around the Chinese New Year in February, the report added.
Last month, Singapore’s second largest taxi-operator Trans-cab has pulled the plug on its IPO at the eleventh hour, three days before its shares were to begin trading.
Universal Terminal had been scheduled to begin its book building on December 4 and had been targeting a December 18 listing. The company planned to ride the the wave of trusts seeking to list their assets in the city state. Had it been successful, petroleum storage company would have emerged Singapore’s largest listing this year.
Till last year, Singapore had benefited significantly from companies using its trust regime, to list their assets in the city state. The situation has been different this year; as funds sought destinations with better returns and appetite for business, trusts or REITs (real estate investment trusts) listings have fallen significantly.
The benchmark this year has been Accordia Golf Trust, which raised S$760 million; but a majority of investors for this IPO were from Japan.
Last year, Singapore saw companies raise more than $5 billion through IPOs. Over 90 per cent of these were business trusts or REITS. In the current fiscal, the figure has been less than a third of this, till now.
A total of 58 trusts have gone for IPOs in Singapore.
PetroChina is estimated to have a 35 per cent stake in the Universal Terminal, while the rest is owned by Singapore billionaire Lim Oon Kuin’s Hin Leong Group. The company had planned to use the proceeds from the IPO to expand its Asia operations.