Abraaj will delay IPO of SA’s Libstar, sources say
London/Johannesburg — Abraaj Group, the emerging markets-focused private-equity firm, is delaying the initial public offering of South African food and household products maker Libstar Holdings, according to people familiar with the matter.
Abraaj, which bought a controlling stake in Libstar in 2014, is weighing a potential listing for Libstar in 2018 after the company publishes its full-year accounts, the people said, asking not to be identified as the information was private. The Dubai-based firm had been working with JPMorgan Chase and Standard Bank on a sale that was expected to raise about $300m in 2017, people said in June.
No final decisions have been taken and the timeline and venue for a share sale could change again, the people said. A representative for Abraaj declined to comment.
A director of Libstar said the company has never made public statements around a potential listing of the business. "Our strategy is to be listing — or sale-ready, so as to take advantage of potential exit opportunities for our private equity shareholders if, as and when these may arise," the company said in an e-mailed statement. "There was no definitive plan to list the business this year. This remains an option, but is not cast in stone."
SA’s economy may not be conducive to IPO activity in coming months with its local-currency debt ratings expected to be downgraded to junk by the end of the year as growth slows and political infighting continues. The 12-member FTSE/JSE Africa general retailers index has declined 7.9% this year compared with an 18% rally that has taken the all share index to a record, fuelled by gains in stocks that earn income from abroad.
Libstar, which started operations in 2005, is one of the largest unlisted food and personal care manufacturers in SA, according to Abraaj’s website. Its annualised net revenue is in excess of R7bn and it operates 28 business units across five of SA’s nine provinces.