Bloomberg News

Cinven Said to Consider Reviving Avio’s Milan IPO by June

March 09, 2012

Cinven Ltd., a British private equity firm, may revive plans for an initial public offering of Italian aerospace company Avio SpA by June, said two people with knowledge of the transaction.

Cinven postponed the IPO last year due to market volatility and could restart the process to list Avio in Milan, said the people, who declined to be identified before an official announcement is made. No final decision has been made on the exact timing and amount to be raised, they said.

At least 12 IPOs were delayed or pulled in western Europe from June to December last year, as stock markets slumped due to the region’s spreading debt crisis. With European leaders making progress on the region’s debt problem, the benchmark Stoxx Europe 600 Index has gained about 23 percent since a September low.

The IPO could raise as much as 1.5 billion euros ($2 billion), a person with knowledge of the matter said in September. At that amount, it would be Europe’s biggest IPO since Spanish lender Bankia SA’s share sale in July.

Cinven held talks with Safran SA (SAF) as well as General Electric Co., while MTU Aero Engines Holding AG (MTX) and the private- equity firms Bain Capital LLC and CVC Capital Partners Ltd. made approaches to buy a stake, people with knowledge of the plans said in September.

While there is still a chance that Avio will be sold, talks with France’s Safran have hit political obstacles, other people said.

A Safran spokeswoman declined to comment. Spokesmen for Avio and Cinven also declined to comment.

2011 Earnings

Avio reported 2011 adjusted earnings before interest, tax, depreciation and amortization of more than 380 million euros, while revenue gained about 15 percent to more than 2 billion euros, it said on Jan. 30.

The Turin-based company generates 84 percent of its revenue from the sale of civil and military engines, 14 percent from space, and 2 percent from civil maintenance.

Cinven bought Avio in 2006 from the Carlyle Group and Finmeccanica SpA (FNC) in a deal that valued the company at about 2.6 billion euros. Finmeccanica, Italy’s biggest defense company, still owns 14 percent of Avio, according to its website.

To contact the reporters on this story: Zijing Wu in London at zwu17@bloomberg.net; Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net

To contact the editor responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net


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