November 9, 2017 / 10:51 AM / a year ago

ContourGlobal makes sluggish London stock market debut

LONDON (Reuters) - Power generator ContourGlobal (GLO.L) was virtually flat on its stock market debut on Thursday, faring better than a number of other recent London IPOs that were either cancelled or traded lower.

The company is a global platform of contracted wind, solar, hydro, and thermal power generation, and investors in the IPO included Singaporean sovereign wealth fund GIC. It was up a tenth of a percent at 250.25 pence by 0939 GMT, having been priced at the bottom of a previously announced range.

London’s IPO market has been hit as broadcasting masts firm Arqiva [IPO-ARGL.L], which would have been this year’s biggest UK listing, and supermarket supplier Bakkavor scrapped their floats last week, blaming volatility and market uncertainty.

They followed business services firm TMF, which cancelled its float on Oct. 27 in favour of a 1.75 billion euro (£1.5 billion) sale to private equity house CVC Capital Partners.

ContourGlobal is an international company and so had its pick of international listing venues, but opted for London.

“London was the deepest pool of international capital and given they have assets all over the world, it would make sense (to list there),” a source familiar with the listing said.

ContourGlobal’s appeal to investors lies in its exposure to long-term and wholesale contracted power generation worldwide and a record of low-risk, long-term contracted cash flows.

The source said the order book demonstrated a “high degree of conviction among high quality long only investors”.

The top five investors took about 65 percent of the book and the top 10 took 80 percent, the source said. Singapore’s GIC was one of the top investors, having put in $200 million.

In the six months ended 30 June 2017, GlobalContour generated revenue of $462.4 million (£353.1 million) and $234.5 million of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).

Other disappointing recent London IPOs include global depositary receipts in En+ (ENPLq.L), which manages Russian tycoon Oleg Deripaska’s aluminium and hydropower businesses. They were trading close to $13, below the listing price of $14 set last week.

Cabot Credit Management will be the next main IPO in London, with trading scheduled to start on Nov. 17.

On Monday, Shefa Yamim, a minerals company focused on the exploration for precious stones in Northern Israel said it intended to list on London’s main market.

Reporting by Dasha Afanasieva; Editing by Susan Fenton

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