Wintershall Dea IPO Pushed Back Again

17.06.2021 - An initial public offering for Wintershall Dea, the oil and gas producer owned by BASF and Letter One – last planned for the second half of 2021 – will not take place this year, the partners announced on Jun. 16, citing an uncertain market.

Based on the current market conditions, the companies said they will delay the move to “a later point in time.” Strategically, however, BASF’s chief financial officer and vice chairman of the managing board, Hans-Ulrich Engel, said the German group “remains fully committed to divest its share.”

Although oil and gas prices on the spot market as well as at the shorter end of the forward price curve have recovered considerably, this improvement is not yet fully reflected in the forward-looking broker consensus assumptions, said BASF, which is majority owner with 67% of the company’s ordinary shares

Additionally, “market valuations of oil and gas companies have for various reasons not again reached the level the shareholders expect to kick off the ipo,” the Ludwigshafen chemical giant said. Nevertheless, “due to its very robust performance, Wintershall Dea remains a strong cash contributor to its shareholders.”

Letter One is a Luxembourg-based consortium of Russian investors led by Russian billionaire Mikhail Fridman. The consortium acquired the Dea business from German energy group  RWE for a reported €5.1 billion in 2014.

The latest postponement of the flotation is the second. The first was planned for early 2020 but was pushed back due to the pressure on prices triggered by the Covid pandemic.

Author: Dede Williams, Freelance Journalist