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Evening Standard
Evening Standard
Business
Simon Hunt

WE Soda abandons IPO as it blames ‘extreme investor caution in London’

The UK’s stock market suffered a huge blow today after We Soda, the world’s largest producer of natural soda ash, aborted plans for a listing that was meant to revive the fortunes of the London Stock Exchange.

The decision comes just days after the IPO was first announced, and will reawaken questions about the City’s desirability as a place for global companies to list their shares.

In a statement, Alasdair Warren, CEO of WE Soda said: "Since our intention to float announcement some weeks ago, we had been encouraged by the breadth of investor engagement globally and the subsequent interest from prospective investors in our IPO.

"Despite this, the reality is that investors, particularly in the UK, remain extremely cautious about the IPO market and this extreme investor caution in London meant that we were unable to arrive at a valuation that we believe reflects our unique financial and operating characteristics. As a result, we have decided to cancel our IPO on the London Stock Exchange.”

The IPO plans, revealed days ago, were expected to raise up to 800 million US dollars (£645 million) for the Turkish-owned company, valuing it at up to 7.5 billion US dollars (£6 billion), and would have made it the biggest UK listing so far in 2023.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “This is a big blow for London just as confidence in the City as an IPO launch pad appeared to be edging back upwards.

“The inflation problem facing the U.K is not helping sentiment, with gilts yields soaring to levels not seen for 15 years amid expectations the Bank of England will have to fire off fresh rounds of interest rate hikes. The uncertainty ahead is clearly off-putting and companies considering IPOs may continue to set their sights on New York instead.”

The firm had previously shrugged off concerns of low valuations and a drought in public listings in the UK.

WE Soda chief strategy and risk officer Nicholas Hall had told the Standard: “Despite the challenging market backdrop, we’re confident of a successful listing.

“The FTSE 100 is associated with quality and prestige and given that history it seems the right place to list. Investors are seeking quality companies with defensive characteristics.”

The company had also explored an offering to retail investors of up to £7 million in shares, the maximum permitted under European rules, in a move which Hall said was because “an important investment opportunity should be open to everyone.” It engaged J.P. Morgan, BNP Paribas and Goldman Sachs as joint global co-ordinators and joint bookrunners.

WE Soda had revenue of $1.8 billion (£1.4 billion) in 2022 with EBITDA of $848 million. The company generates five million tons of natural soda ash annually across two facilities in Turkey. Proceeds from the IPO will be used to fund its $5 billion investment into building two new sites in Wyoming, USA, in a bid to more than double production. Glass manufacturing accounted for around 60% of global soda ash demand in 2022.

The company is chaired by Didem Ciner, a graduate of the London School of Economics and the wife of Turgay Ciner, the billionaire behind the Ciner group conglomerate, which owns a number of industrial and energy businesses as well as Turkey’s highest-circulation newspaper, Haberturk, and operates the Turkish TV station of media firm Bloomberg.

Another of the company’s subsidiaries, Ciner glass, was granted permission to build a £390 million glass container factory in South Wales in June last yea, creating 600 new jobs.

The decision to abandon a listing means London-based fintech firm CAB Payments, which provides business-to-business cross-border payments, is now set to become the first major IPO on the LSE this year after it revealed plans for a listing last week in a move which could value it between £800 million and over £1 billion.

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