Plans for cryptocurrency Hong Kong IPO shelved amid bitcoin slump

Bitcoin experienced astonishing growth in 2017 to peak at a record $19,500 by the end of that year, but has since crashed to stand at about $3,980. (AFP)
Updated 27 March 2019

Plans for cryptocurrency Hong Kong IPO shelved amid bitcoin slump

  • Bitmain Technologies has allowed its IPO application to lapse, six months after it was initially filed in September
  • ‘The bear market at the end of 2018 brought both challenges and opportunities that Bitmain will work hard at addressing in 2019’

HONG KONG: The world’s largest maker of cryptocurrency mining chips has shelved plans for an ambitious initial public offering in Hong Kong, becoming the latest victim of bitcoin’s price plunge.
Bitmain Technologies said Tuesday it has allowed its IPO application to lapse, six months after it was initially filed in September aiming to raise up to $3 billion, according to Bloomberg News.
Under Hong Kong’s listing rules, applications expire half a year after filing.
“We do recognize that despite the huge potential of the cryptocurrency and blockchain industry, it remains a relatively young industry which is proving its value,” the Beijing-based company said on its blog on Tuesday.
“The bear market at the end of 2018 brought both challenges and opportunities that Bitmain will work hard at addressing in 2019,” it said, adding it would restart its application “at an appropriate time in the future.”
Bitcoin experienced astonishing growth in 2017 to peak at a record $19,500 by the end of that year.
But investors feared a speculative bubble and it has since crashed to stand at about $3,980 per unit following months of volatile trading.
The virtual bubble burst — followed by what has become the worst slump in years — has made mining operations practically unprofitable.
Bitmain’s co-founders Micree Zhan and Jihan Wu became the richest cryptocurrency billionaires to appear on a list by Hurun Report last year of China’s wealthiest people.
The entrepreneurs have stepped down from their roles as CEOs and were replaced by Haichao Wang, the statement said, but it added the pair would continue to guide the company’s strategic development as directors.
In addition to a leadership reshuffle, the announcement also alluded to layoffs made at the end of last year and described them as “a difficult but necessary decision.”
It did not say how many employees were affected.
Other manufacturers have faced similar hurdles recently.
Bitmain’s rival Canaan saw its listing application expire in November.
Mining chip maker Ebang is still pursuing a Hong Kong IPO after refiling its application in December.


Saudi defense contractor to invest up to $16 million to further localize services

Updated 18 November 2019

Saudi defense contractor to invest up to $16 million to further localize services

DUBAI: Saudi-based defense contractor Middle East Propulsion Company (MEPC) plans to invest between $13 million and $16 million over the next two years to build test cells for aircraft engines and establish new production lines.
These expansion activities should complement the company’s objective to localize high-tech repairs and combine them in one roof for the Saudi defense ministry, which is a major customer, CEO Abdullah Al-Omari told Arab News.
Instead of sending aircraft engines and engines modules overseas for further servicing, thus take up more time before military assets return to actual service, localization not only cuts the turn-around period but also reduces Saudi government spending for the repairs.
“We have accomplished more than 1,600 engine and engine modules [since 2001, they] have been maintained totally in Saudi Arabia,” Al-Omari said at the sidelines of the Dubai Airshow. “The engines consume 45 percent of what you spend on aircraft.”
The company works on 150 to 160 engines and engine modules every year.
MEPC is the first specialized MRO (maintenance, repair and overhaul) company operating in the Middle East, according to its website. It has invested over $26 million during the previous two years for the localization of its MRO services.
“We used to send these parts to outside, it takes 6 months to 24 months sometimes … in case of the Apache engines, minimum turn around is 24 months,” Al-Omari said, but their localization efforts have greatly improved their capability by cutting the turn-around period to only 150 days.
The speed at which MEPC is able to repair engines and modules, boosts the readiness of Saudi military, Al-Omari added.
The company is in talks with major defense contractors, including Honeywell for the Abrams talks and GE T700 engines, for possible tie-ups to further improve their capability, he said.
“Currently there is a potential with the Kuwait army to provide them with similar services [being delivered to the Saudi defense ministry],” Al-Omari said, and expects that cooperation would start “within the next two years or so.”