Nobao Renewable Energy pulls IPO for second time
American investors are again reassessing the under-lying value of Chinese companies which make their way to float on US exchanges. Nobao Renewable Energy has once again pulled its initial public offering (IPO).
While it is not uncommon for companies to rethink IPO plans after filing their intentions with the Securities and Exchange Commission (SEC), this is the second time it has rescinded its planned launch and only weeks after saying it was back in the game.
The Chinese heat pump developer said that market conditions were the main reason for the cancelled IPO.
Money raised for the USD300 million IPO was tipped for paying project costs associated with the Su-Tong Science and Technology Park energy supply project. Even though the contract is valued at USD2.1 billion, the on-going corporate procrastination does little to help instil confidence in US investors.
The short period between refiling for the IPO and again pulling it, may be perceived by investors as a management with a deeply flawed understanding of the financial markets and calls to question whether an IPO was the correct route for specifically financing project contracts.