KNF 'concerned' about Raiffeisen suspending its IPO

The Financial Supervision Authority (KNF) is concerned that the Raiffeisen has suspended works on its IPO due to insufficient interest from investors. “KNF will take necessary steps to ensure that bank shares are floated on the Warsaw stock exchange with free float at 15 percent or higher,” it said, and has asked the bank to fully explain the situation. Last week, Raiffeisen Polbank announced that it is suspending its IPO, due to lack of investors demand. “This was due to an insufficient level of interest in the offer on terms that meet the parameters of Raiffeisen commitment to KNF to float shares of Raiffeisen Bank Polska on the Warsaw Stock Exchange,” the bank said. “The decision to suspend the IPO was taken without an indication of a new timetable to replace the previously announced offering period,” it added. According to media reports, potential investors were not interested in the offer at the price set in the IPO prospectus at PLN 25.5-28, which would value the offer at PLN 860-950 million. According to Reuters, a small group investors wanted to buy some shares at a 40 percent discount, and the bank could only cut the price by 10 percent. The reason for small interest was the bank's low profitability and portfolio of toxic Swiss franc-denominated mortgages.