* Bis Industries had sought to raise around $450 mln
* No timeframe for reviving float
* IPO hit after rivals' shares sank on profit warnings
By Sonali Paul
MELBOURNE, Nov 27 Mining services firm Bis
Industries Ltd, owned by KKR & Co, has called off a
planned A$500 million ($456 million) IPO, underscoring the grim
prospects for Australia's resource sector in an otherwise
buoyant market for stock offerings.
The decision by KKR comes after investors hammered the
shares of mining and energy services firms following several
profit warnings over the past few weeks due to the poor outlook
for new projects and exploration spending as demand for
In contrast, Australian companies have so far this year
raised $2.4 billion through initial public offerings (IPOs),
more than double the volume for all of 2012, according to
Thomson Reuters data.
"The feedback I have had from investors is that, whilst they
acknowledge that Bis Industries is a high quality business with
a strong and attractive market position, the current negative
sentiment around resources expenditure is impacting on all
companies exposed to the sector," Bis Industries Chief Executive
Ian Lynass said in a statement.
Australia's biggest mining and energy services firm Worley
Parsons lost more than a quarter of its market value last week
after it slashed its profit outlook.
Ausdrill Ltd has slumped nearly 40 percent
following a profit warning earlier in the month, and smaller
rivals Forge Group and Ausenco have both
flagged balance sheet problems, which have resulted in
suspension of trading in their shares.
Bis Industries is different from most of the companies that
have slashed their profit outlooks as these firms are mostly
involved in exploration drilling or construction of new mines
and energy projects. It, however, remains vulnerable to the
volatility in the sector.
"We recognise investor sentiment is not currently conducive
to an IPO and therefore have elected to not proceed at this
time," Bis CEO Lynass said.
KKR has owned Bis Industries since 2006. The company was
created from the business units that were left over from
Brambles Industrial Services, which KKR bought from Brambles Ltd
in June of that same year.
KKR had intended to hold on to its entire stake in the IPO
and remains committed to the business, a spokesman said.
Listings in Australia and New Zealand were expected to rise
five-fold this year to $8.9 billion from 2012 in the busiest
year for new offerings since the global financial crisis.
In a positive sign, jobs portal Freelancer Ltd
soared up to 400 percent on its debut on nearly two weeks ago.
Others expected to list before the end of the year include
Australian packaging group Pact Group, consumer electronics
retailer Dick Smith Holdings Ltd, and education training
provider Vocation Ltd.
Bank of America Merrill Lynch, Goldman Sachs and UBS AG
were the joint lead managers on the Bis Industries