February 22, 2019 / 4:25 PM / 9 months ago

Virgin Trains USA withdraws IPO

Feb 22 (Reuters) - Virgin Trains USA said on Friday it has withdrawn its initial public offering, after putting a hold on the plans on the eve of its scheduled public listing earlier this month.

Virgin Trains on Feb. 12 said that a number of alternative financing sources became available for the railway operator that would allow the company to keep it private and meet its growth strategies.

The company’s IPO was expected to raise $500 million. But some investors and analysts said the pricing was too high.

“The price they were expecting was too high and it would have led the listing to go off the tracks,” Eric Schiffer, chief executive officer of investment firm Patriarch Partners LLC, had earlier said.

“Had they come lower on pricing, it would have hurt the investors, so they decided to hold it for a while, grow and then come back again. But it will come back for sure.”

The railroad had planned to sell 28.3 million shares in its IPO, which was expected to be priced at $17 to $19 per share, according to its filing with the SEC.

The company had reported a net loss of $87.13 million for 2018, compared with a loss of $35.96 million in 2017, mostly due to higher expenses, its filing showed.

Barclays, J.P. Morgan and Morgan Stanley were among its lead underwriters, with BofA Merrill Lynch and Allen & Co LLC serving as joint bookrunners. (Reporting by Diptendu Lahiri in Bengaluru; Editing by Maju Samuel)

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