Bug fears to spark IPO shut-down
Thursday 15 July 1999
The prospect of a virtual buyers' strike in the final months of 1999 because of year 2000 fears is a severe blow to the companies hoping to raise 20bn or more euros of new issues already announced for the autumn, but which now look in serious danger of not going ahead.
Gerling, a German insurance company that was planning to come to the stock market with a $1bn issue within the next few months, has already postponed its share issue until next year, rather than risk embarrassing questions about the readiness of its customers to deal with the millennium issue. Among companies that could be affected by an investor shut-down are Scottish Telecom, which is due to be spun off from Scottish Power later this year; Iberia, the Spanish airline; easyJet, and Carphone Warehouse, the mobile phone retailer which was also planning to come to the market this autumn.
Bankers said there are other potential issuers, particularly banks and telecoms companies in emerging markets, which have been working on issues that have not yet been made public but which have now been forced to put back their plans.
John St John, head of equity capital markets at Lehman Brothers in London, said most of the big investment houses were working on the assumption that October is the deadline for bringing new companies to the market. "We are starting to pick up from institutions that they are looking to clear their books down in about November and therefore we should not be bringing companies to the market," he said.
Although some issues are still pencilled in for September bankers warn that Infineon, the $5bn computer chip spin-off from Siemens, the electronics giant, scheduled for October, is likely to be the last stock market flotation of size in Europe this year.
Others who are not in a position to get their issues away immediately after the August break may now have to wait until worries about the impact of Y2K on the financial markets have settled down in the new year.
Any companies planning to list much later than September run a serious risk of their timetables stretching into late November when the minds of the decision-makers at investing institutions will be on Y2K.
The past few weeks have seen new issues pile up as bankers rush to get as many away as they can before the traditional summer break. Leading fund managers have complained of "roadshow fatigue".
Neil Austin at KPMG said: "There is certainly nervousness about the millennium. There is going to be a slowdown."
The successful sale this week in London of Kingston Communications, the Hull telephone company, and South Africa's Old Mutual testifies to investors' strong appetite for new issues, as do the strong debuts of recent international issues such as the Credit Lyonnais privatisation and the sell-off of Monte dei Paschi di Siena, the Italian bank.
Some 20bn euros of equity issues have been priced in Europe over the past 10 days alone, after 38bn euros in June.
- 1 Engineer pictured fixing plane's engine with 'duct tape' by concerned EasyJet passenger
- 2 Two-year-old says goodbye to bin man best friend
- 3 Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
- 4 There is something wrong but very right about this Bible illustration
- 5 Remove smartphones from the hands of under-18s and maybe they will grow up to be less dumb
Engineer pictured fixing plane's engine with 'duct tape' by concerned EasyJet passenger
Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
Ancient 2,400-year-old gold bongs discovered in Russia
Porn stars in California may be forced to wear goggles under new legislation
Tampon tax scrapped in Canada after petition convinces conservative government
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
A nation of inequality: How the UK is failing to feed its most vulnerable people
Australian man punched in the face for defending Muslim women from abuse on train
David Starkey 'tells Amal Clooney to shut up and stop over-promoting human rights'
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...