Evonik Share Sale Timing Under Review as Market Risks Persist

Evonik Industries AG’s majority owner said it may need to review the timing of a planned initial public offering for Germany’s second-largest chemical company amid continued turmoil in equity markets.

The board of trustees of RAG Stiftung, which owns 74.99 percent of Evonik, said it approved the funds needed to prepare for an IPO, without giving a date. Evonik is “well prepared” for a stock listing, the foundation said in a release yesterday.

The company said in March it was aiming for an IPO in the first half. CVC Capital Partners Ltd. also plans to sell its 25.01 percent stake and end a four-year involvement in the maker of additives and specialty plastics used in car parts, in what would be among the largest German IPOs in a decade.

“Together with Evonik and CVC we want to push on with preparation for the IPO in light of the economic perspective and the strong interest in Evonik from the capital market,” RAG Chairman Wilhelm Bonse-Geuking said in the release. “We have to keep an eye on the not unimportant and growing risks.”

Evonik, which is a candidate to join Germany’s benchmark DAX index, postponed its IPO plans last year, after the European debt crisis created volatility on capital markets. The company raised its full-year profit and sales forecast this month, benefiting from increased demand for ingredients and additives used in drugs, animal feed and cosmetics.

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When RAG and CVC first proposed the IPO last year, they planned to raise 4 billion euros ($5.1 billion) to 7 billion euros in a first tranche, valuing Evonik at as much as 20 billion euros, people familiar with the matter said at the time. Deutsche Post AG raised 5.84 billion euros in an IPO in 2000.

Standard & Poor’s upgraded Evonik one level to BBB+ on May 9 after the company cuts debt. That’s three levels above non-investment grade. Evonik posted sales of 14.5 billion euros and earnings before interest, tax, depreciation and amortization of 2.77 billion euros last year. The company had a “good start” to the year and its economic prospects are encouraging, Bonse-Geuking said in yesterday’s release.

The DAX index has fallen 7 percent this month as political deadlock in Greece boosts the likelihood of the country’s exit from the euro. Siemens AG was also forced to suspend a listing of its Osram lighting subsidiary, which it announced last year.

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