Greek Crisis Market Jitters Led to Giti IPO Postponement
Giti Tire’s decision to postpone its Hong Kong initial public offering, was prompted by market jitters following on from the Greek debt crisis, news agency AFP has reported. Giti, the largest tyre manufacturer in China, decided to hold-off on its $500-million dollar offering on 4 May in what was its second attempt to get such an IPO off the ground.
In addition to the macro-economic concerns that the Greek crisis is symptomatic of, in Hong Kong and China concerns also stem form Beijing’s perceived “appetite for bubble-bursting.”
However, while the deal has been shelved for the time being it is not completely off – a listing approval is usually valid for six months. After this, the correct filling in of a bit more paperwork (such as updated financial information) can lead to an extension or a new listing application being accepted.
In January 2007 Giti Tire Pte Ltd successfully completed a $200 million bond issue that reportedly attracted about $500 million in orders. In this case the funds the issue attracted were said to have been for a $160 million loan to its parent company, for “future investments and for working capital requirements.”
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