Hapag-Lloyd has lowered the price range of its initial public offering (IPO) on the Frankfurt and Hamburg stock exchanges from the original €23-29 range to €20-22 per share “due to ongoing market volatility”, a statement said today.
The Germany-headquartered container line expects to begin trading its shares on the regulated markets in Frankfurt and Hamburg on November 6.
The IPO’s $300m target for gross proceeds remains intact, but Hapag-Lloyd has altered the structure of the offering. The adjusted offering now consists of a total of up to 15,212,978 shares, a slight reduction on the 15.7m shares mooted previously, which included 11.5m in new stock.
Including primary proceeds for Hapag-Lloyd and potential over allotments, the offering size could be up to $345m (€304m). “This would imply a free float of up to 18% across the price range, including existing Hapag-Lloyd shareholders with an ownership of below 5%”, the company said today.
As part of the adjustments, some 13,228,677 shares will be sold at the new offer price as part of the offering’s capital increase.
Up to 1,984,301 shares owned by TUI-Hapag Beteiligungs (TUI) will be offered to cover potential over allotments, but TUI will not be provided with an additional shares placement option. This new arrangement effectively blocks TUI, which owns 14% of Hapag-Lloyd, from selling any of its existing holding, except to cover excess demand.
Hapag-Lloyd’s major shareholders Kühne Maritime and Compañía Sud Americana de Vapores (CSAV) remain committed to each buying tranches of shares worth $30m (around 1.4m shares each, based on €20 per share).
The adjusted price range of the offering is something of a climbdown for Hapag-Lloyd, which on Monday released a statement to reassure potential investors in the wake of Maersk Group’s $600m profit warning issued on October 23. On Thursday, China Shipping Container Lines (CSCL) posted a $170m quarterly loss.
“In response to queries received following Maersk’s update, Hapag-Lloyd reiterates its outlook for 2015 as provided in the IPO prospectus,” Hapag-Lloyd said on Monday.
“Based on current trading, the EBITDA margin in September is expected to be in line with the information provided in the IPO prospectus for July and August. For the full-year 2015 the outlook remains unchanged, Hapag-Lloyd is expecting a high single-digit EBITDA margin,” the carrier said on Monday.
The line posted EBITDA of €125.2m in July and August 2015, giving a margin of 8.5% and net profit of €2.1m, according to its IPO prospectus, published October 14.
The German Financial Supervisory Authority (BaFin) is expected to approve the supplement to Hapag-Lloyd’s IPO prospectus today.