NEW YORK, Nov 1 (IFR) - Hurricane Sandy also made its presence felt in IPOs this week, as one prospective issuer elected to postpone the planned launch of marketing and another put off plans to go public indefinitely. But market sources are expecting activity to pick up in earnest after the presidential election on Tuesday.
SolarCity was scheduled to launch its IPO as early as this week but elected to not to do so. The company, which builds solar arrays for residential and commercial customers and then sells power back to them at rates cheaper than traditional utilities, will wait until after the election before proceeding, according to sources close to the situation.
The roadshow was to have kicked off in New York City with management presentations at the underwriting banks, and that factored into the decision. Limited staffing levels at each of the joint bookrunners - Goldman Sachs, Credit Suisse and Bank of America Merrill Lynch - made the decision to postpone a foregone conclusion.
“Roadshows start with management teach-ins of the sales force in New York,” said one source. “The sales force is the point of contact to educate their clients. It is not just worth risking until we get great clarity.”
SolarCity tentatively flagged a US$201.25m all-primary offering on its initial registration statement in early October. The company, which had confidentially filed with regulators in April, did not provide additional details, such as sizing or indicative pricing levels.
The IPO would be the latest in a series of financings that SolarCity has completed. In the first quarter of this year the company raised US$81m in a series G preferred stock sale to investors that included Tesla chairman and CEO Elon Musk, the company’s largest shareholder with a 31.9% pre-IPO stake.
Meanwhile grocery-store chain Fairway Group Holdings has put its IPO on hold following the nearly complete destruction of its store in Red Hook, Brooklyn - one of 11 stores that the company operates. The company had planned to launch marketing of the offering, tentatively sized at $150m, in mid-November, according to sources.
Credit Suisse, Bank of America Merrill Lynch, Jefferies and William Blair were mandated as joint bookrunners on the planned offering.
Fairway Group, which is majority-owned by Sterling Investment Partners, had been working to resolve the rate paid to landlord at its Red Hook outlet, as well as at two other locations. The company and the landlords have been negotiating a periodic reset of the fair market rent on the property. It has paid about US$1.4m, excluding charges paid to the owners, in rent on the Red Hook facility in each of the past three years, according to the company’s prospectus.