Emeco Holdings Ltd. last week debuted on the Australian Stock Exchange below its initial marketing range. The Perth, Australia-based heavy equipment rental company debuted at AU $1.82, 8 cents below the $1.90 issue price, and fell to a low of $1.77 before closing at $1.795.
Still, Emeco was the top-traded stock by volume of the day, with more than 64 million shares worth AU $116.86 million changing hands. Some investors may have shied away from the stock after Emeco cut the issue price of its shares to $1.90 from a marketing range of $2.10 to $2.50 because of slower than expected demand. Emeco’s lead managers said market volatility dampened the results, particularly concerns about the U.S. and Australian economies, interest rates, the current Middle East conflict and rising oil prices.
Although the total capital raised — about AU $944 million (U.S. $723 million) — fell short of the company’s goal of about $1.1 billion, managing director Laurie Freedman was bullish about the IPO and said the company would still meet its stated objectives to reduce net debt to about $250 million and raise “the capital requirements to fund growth opportunities in key markets across Australia, Indonesia, North America and Europe.”
Emeco has branches in Australia, Indonesia, Canada, Japan, the United States and the Netherlands. The company plans to expand internationally and is believed to be particularly focused on the North American market, where it has locations in Houston, Atlanta and Edmonton, Alberta. Emeco North America is No. 76 on the RER 100.