UAE’s Finablr cuts IPO price in volatile markets

Finablr has been seeking to raise $200 million from the sale of new stock ahead of flotation on the London Stock Exchange. (File/AFP)
Updated 14 May 2019
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UAE’s Finablr cuts IPO price in volatile markets

  • The listing of the shares is expected on Wednesday
  • The company, whose brands include UAE Exchange, Travelex Holdings and Xpress Money, has been seeking to raise $200 million from the sale of new stock ahead of flotation on the London Stock Exchange

ABU DHABI/LONDON: United Arab Emirates-based Finablr had to cut the price on its initial public offering as the payments and foreign exchange company faced weak investor demand in jittery markets which also rocked ride-hailing app Uber’s Wall Street debut.
Finablr was priced at 175 pence per share, the bookrunner said on Tuesday, significantly below an initially anticipated 210-260 pence range, giving the company an implied market value of about 1.23 billion pounds ($1.59 billion).
Books were covered at full value of the deal worth 192.5 million shares, according to a message seen by Reuters from a bookrunner, which means the share offering will raise about 337 million pounds.
The deal size includes a revised base deal size of 175 million shares and 17.5 million of over-allotment option shares, the bookrunner said.
This came after global stock markets tumbled on Monday as the trade dispute between the United States and China escalated.
In the UAE, where the company is based, both stock markets in Abu Dhabi and Dubai suffered their biggest single-day declines in years due to escalating tensions in the Middle East after several commercial ships were attacked off the coast of the UAE.
Finablr extended the closing of books for the London IPO to Tuesday from Monday due to the volatile market conditions, two sources familiar with the deal said on Monday.
The company, whose brands include UAE Exchange, Travelex Holdings and Xpress Money, has been seeking to raise $200 million from the sale of new stock ahead of a flotation on the London Stock Exchange (LSE).
RIGHT REGISTER
The listing of the shares is expected on Wednesday, said the sources, who declined to be identified because the information is not yet public.
“The closing of books is extended by a day because of market volatility. Finablr wanted to get the right register,” one of the sources told Reuters.
Finablr’s IPO plans were confirmed last month following the successful public flotation of Middle East payments firm Network International.
The Finablr network has a global reach spanning more than 170 countries and managed $114.5 billion in annual volumes for its clients as of December. Its biggest markets are India, Pakistan, Bangladesh and the Philippines.
The holding company Finablr will become the umbrella for UAE-based business tycoon and founder Bavaguthu Raghuram Shetty’s financial service brands.
Shetty, Finablr’s biggest shareholder, bought UK-based Travelex in January 2015 for 800 million pounds ($1.1 billion). He took another company he founded, NMC Health, public on the LSE in 2012. Like NMC Health, Finablr will have its headquarters in the UAE.
JPMorgan, Barclays and Goldman Sachs are global coordinators for the deal. Bookrunners include Bank of America Merrill Lynch, EFG Hermes and Numis . Evercore is acting as financial adviser.


Samsung shares rise as Huawei struggles

Updated 29 min 36 sec ago
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Samsung shares rise as Huawei struggles

  • Huawei has been rocked with promblems in the past weeks, including major revelations from tech giants
  • Samsung is the world’s biggest smartphone maker which has been facing increasing competition from its Chinese rival

SEOUL: Shares in Samsung Electronics climbed nearly three percent Tuesday on the back of its chief rival Huawei’s mounting problems, including a decision by Google to sever ties with the Chinese mobile phone maker.
It is the latest in the months-long saga between Huawei and the United States analysts warn could see Chinese semiconductor demand fall, threatening a nascent Asian recovery in the industry.
US Internet giant Google, whose Android mobile operating system powers most of the world’s smartphones, said this week it is cutting ties with Huawei to comply with an executive order issued by President Donald Trump.
The move could have dramatic implications for Huawei smartphone users, as the firm will no longer have access to Google’s proprietary services — which include the Gmail and Google Maps apps.
Investors bet Huawei’s loss could benefit Samsung, the world’s biggest smartphone maker which has been facing increasing competition from its Chinese rival, sending its shares up 2.7 percent at closing on Tuesday.
Analysts say the US ban will damage Huawei’s ability to sell phones outside China, offering Samsung a chance to consolidate its position at the top of the global market.
“If you are in Europe or China and couldn’t use Google map or any Android services with a Huawei smartphone, would you buy one?” MS Hwang, an analyst at Samsung Securities, told Bloomberg News, adding: “Wouldn’t you buy a Samsung smartphone instead?“
Samsung accounted for 23.1 percent of global smartphone sales in the first quarter of this year, according to industry tracker International Data Corporation, while Huawei had 19.0 percent.
But Huawei’s troubles may be a double-edged sword for Samsung — also the world’s biggest chipmaker — if it leads to a plunge in demand for semiconductors.
China dominates purchases from Asian chip makers and bought 51 percent of their shipments in 2017, Bloomberg reported citing a Citigroup analysis. Including Hong Kong, it accounted for 69 percent of South Korea’s chip production.
“In our view, China’s restocking efforts for electronic goods will likely weaken and be delayed if the tensions and the ban stay longer, which likely will hurt overall demand,” the report said.
Last week, Trump declared a “national emergency” empowering him to blacklist companies seen as “an unacceptable risk to the national security of the United States” — a move analysts said was clearly aimed at Huawei.
The US Commerce Department announced a ban on American companies selling or transferring US technology to Huawei, with a 90-day reprieve by allowing temporary licenses.