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French cloud outage is worst possible IPO weather

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A view shows the damaged building of French cloud computing company OVHcloud after a fire broke out early on Wednesday in Strasbourg, France, March 10, 2021.

LONDON, Oct 13 (Reuters Breakingviews) - OVHCloud has given investors one more reason to think twice about its initial public offering. The French cloud-computing group, which wants to list with an equity value between 3.5 billion euros and 3.7 billion euros, on Wednesday said its network was down due to human error during the reconfiguration of a U.S. data centre. Its IPO is scheduled to price on Thursday.

Founder Octave Klaba is no stranger to hitches: a fire in March took down four data centres in Strasbourg, France. That incident could end up costing the company 130 million euros after factoring in lost revenue, litigation provisions, impairment charges and the cost of reimbursing customers and replacing equipment.

Prospective investors may already have been put off by weak governance rights and slow growth . Other recent IPO candidates, like Dutch online store Coolblue, have shelved their plans citing market volatility. OVHCloud may be next in line. (By Liam Proud)

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Editing Peter Thal Larsen and Karen Kwok

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