August 3, 2012 / 5:50 AM / 5 years ago

UPDATE 1-CLP's $3 bln TRUenergy Australia IPO may be delayed, cut-sources

4 Min Read

* November launch date may be pushed to early 2013 - sources

* $3 bln raising in current market is tall task - sources

* TRU, CLP not in a hurry to raise the funds - source (Adds TRU spokesman declines to comment, additional comments from source)

By Narayanan Somasundaram

SYDNEY, Aug 3 (Reuters) - Australia's TRUenergy could delay its initial public offering and cut the size from an earlier planned $3 billion if markets weaken, two sources said, a move that would mirror the fate of several other deals in the Asia-Pacific region.

The IPO, slated to be Australia's biggest in about two years, could be pushed back to the first quarter of 2013 from the November date targeted earlier, the sources, who had direct knowledge of the matter, said. The $3 billion sought to be raised from the IPO was high under current market conditions, they said.

The size could fall to between $2 billion and $2.5 billion, one of the sources said. The sources declined to be named as the deal is confidential.

A spokesman in Melbourne for TRUenergy, a wholly owned unit of Hong Kong-listed power utility CLP Holdings, declined to comment.

The move would follow a series of canceled or delayed IPOs in the region, such as motorsport racing company Formula One's up to $3 billion Singapore listing and London luxury jeweler Graff Diamonds' $1 billion Hong Kong IPO.

A delay to 2013 would also add to struggles of the Australian IPO market, which hasn't seen a single offering worth more than $100 million so far in 2012.

The last big domestic IPO was QR National's $4.6 billion offering in late 2010. And only $225.7 million has been raised through 10 IPOs in Australia so far in 2012 compared with $795 million in 2011 and $7.3 billion in 2010, according to Thomson Reuters data.

"TRU is not in a hurry. It does not want to get into a position where it launches and then markets force it to call it off or delay it," one of the sources said. And CLP Holdings had the comfort to wait as it did not have any pressing refinancing coming up, the source added.

Volatile Markets

Volatile markets have roiled new offerings globally. In Asia, equity capital market deals tumbled 30.4 percent to $77.9 billion in the first half, with IPO volumes down 62 percent, Thomson Reuters data shows.

In Australia too several planned offerings have fallen by the wayside, including a $800 million float of Genworth Financial' s Australian mortgage insurance unit.

Strong assets still seem to be finding favour with investors.

On Friday Japan Airlines said it expected to raise about $8.5 billion in an IPO next month, nearly doubling the investment of a state-backed fund that injected capital following its bankruptcy in 2010.

TRU owns 5,469 MW of generation capacity, including the Yallourn baseload coal-fired power station in Victoria, a 180 MW gas-fired Hallett power station in South Australia and a 966 MW hedge agreement with the Ecogen Newport and Jeeralang power stations in Victoria, according to information on its website.

It also has a 111 MW windfarm in South Australia.

UBS, Deutsche Bank and Bank of America Merrill Lynch are underwriting the offering while Rothschild is advising CLP on the IPO process. (Editing by Muralikumar Anantharaman)

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