A Leopard 2 tank gear transmission in a production hall at the Renk AG plant in Augsburg, Germany, on Monday, May 8, 2023.
Bloomberg | Bloomberg | Getty Images
German defense contractor Renk on late Wednesday announced it would indefinitely postpone its initial public offering on the Frankfurt Stock Exchange scheduled for the following morning.
“In the past days, the market environment has clouded noticeably,” the company said in a statement, providing no further details.
CNBC has contacted Renk for comment.
The company said that it and its majority shareholder, investment firm Triton, are considering going public at a later date.
Renk produces parts for a range of civil and military machines and vehicles, including Germany’s Leopard 2 tank that are being supplied to Ukraine.
Shares were set to be offered in a price range between 15 euros ($15.77) and 18 euros, with a total placement volume between 405 million and 486 million euros.
The company would have seen a potential valuation of up to 1.8 billion euros, Primanews reported.
Renk group CEO Susanne Wiegand previously said the firm saw “strong momentum” in its core business and intended to use the IPO to “tap further options for supporting our growth.”
The company has benefited from the rise in global instability and military spending. It reported an increase in audited gross profit from 124.5 million euros to 164.8 million euros in the fiscal year ending on Dec. 31 2022.
European bourses had a mixed first half of the year, with funds raised through listings on the Paris Stock Exchange plunging 92%, while the London Stock Exchange held steady.
German pharmaceutical firm Schott Pharma debuted in Frankfurt last week — in the exchange’s third listing of the year so far — with shares climbing above its target range.
Higher interest rates have weighed on sentiment across global markets, and concerns have intensified in recent weeks as central banks emphasize a message of higher-for-longer rates.
“Timing is everything for an IPO and the nervousness infiltrating investor sentiment has clearly led to fears enthusiasm for a new listing will be lower than hoped,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown, in emailed comments.
“Economic waters are getting choppier in the eurozone with the latest HCOB PMI numbers for the bloc indicating demand fell in September at a rapid click, the fastest pace in almost three years,” she said.
“With companies and consumers turning increasingly cautious amid high interest rates, and waves of uncertainty hitting markets, it’s little surprise [Renk] is delaying its floatation until calmer waters return,” she added.
