Company had expected to debut on NASDAQ Dubai with a market value of up to $1bn
UAE handset retailer Axiom Telecom cancelled its initial public offering on Monday, citing "market conditions and liquidity" concerns.
In November, Axiom had said it expected to debut on NASDAQ Dubai in early December with a market value of up to $1 billion after selling up to one third of its shares to institutional investors. The IPO was not open to retail investors.
A company statement said: "While there were sufficient orders to fully cover the IPO book at the price range, primarily due to demand from high quality international investors in Europe and the U.S., there were widespread concerns about market conditions and liquidity."
Adding that plans to list on NASDAQ Dubai were also cancelled, it said: "The board has therefore decided to withdraw the offer at this juncture to protect current and future shareholders of Axiom."
In the first IPO in the UAE in nearly two years, Axiom had set a share price range between $0.80 and $1.15 and said it would use $100 million of proceeds from the share sale and a $55 million property sale to pay back part of $354 million in existing credit lines.
Mohammed Yasin, CAPM Investment chief investment officer said: "Regardless of valuations or the pricing, we were hoping Axiom's IPO would come to the market and the fact it didn't happen is not a good sign."
He said: "For IPOs to succeed they need retail investors to participate - without retail, institutions will not make much money."
This absence also meant banks missed out on profiting from lending to retail investors who could have subscribed to the IPO, Yasin told Reuters.
Axiom's CEO said the company would re-evaluate its options later.
In the statement, Faisal Al Bannai said: "We remain extremely confident in the strengths of Axiom's business, growth prospects and suitability as a public company and will be re-evaluating our options in the future."(Reuters)
strange, normally the selling group guarantees the liquidity for a certain amount of time after the IPO