Market volatility threatens Evonik IPO

Greg Gille
@unquotenews
11 June 2012

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The RAG Foundation, which owns a majority stake in CVC-backed German chemicals maker Evonik, could cancel the company's IPO in light of the current market environment.

"The developments on the financial markets since the end of May have resulted in a mounting uncertainty whether proceeds can be achieved that reflect Evonik's inherent value," the Foundation said in a statement.

"Both the Board of Trustees and the Board of Executives share the view that these issues call for clarification, as otherwise the IPO of Evonik will have to be cancelled," the statement continued.

RAG's board will hold meetings with investors this week to inform its decision, which will be taken by the end of June.

Evonik confirmed at the end of May that it was looking to float on the Prime Standard segment of the Frankfurt stock exchange. Evonik's owners are reportedly aiming for a valuation in the region of €15bn, which is understood to be considered too steep by investors.

CVC owns a 25% stake in the business, which it acquired for €2.4bn in 2008. The majority is owned by the RAG Foundation, which was set up by the government in 2007 to ease the social costs and liabilities associated with the ending of subsidised coal mining in 2018.