BELFAST \u2014 Franco-German land vehicles manufacturer KNDS has decided to indefinitely hold off on a planned stock market listing, citing concern around European defense \u201cmarket volatility.\u201d<\/p>\n
Shareholders told the firm of \u201ctheir intention to resume the Initial Public Offering (\u201cIPO\u201d) process upon the return of more favorable market conditions,\u201d according to a statement released on Wednesday.<\/p>\n
KNDS said it has \u201ccompleted substantially all required preparation phases for its proposed listing.\u201d The company, which produces the Leopard 2 main battle tank among other armored vehicles, is due to list its shares in Frankfurt and Paris.<\/p>\n
\u201cKNDS and its shareholders will continue to monitor the capital markets conditions closely and stand ready to resume the IPO process as soon as market conditions allow,\u201d it added.<\/p>\n
Prior to the postponement, the potential, multi-billion dollar stock launch was tipped to go ahead in June, according to Bloomberg<\/a>. As Breaking Defense previously reported<\/a>, in preparation for the KNDS IPO, France and Germany finalized an agreement last month that sets the two countries up to become equal shareholders in the European giant.<\/p>\n At that time, Berlin and Paris said that by inking a framework pact, they had taken \u201ca decisive step towards strengthening their common sovereignty in land defence.\u201d<\/p>\n The KNDS statement Wednesday did not specify the shareholders concerns, but major defense decisions or mooted spending plan limits have roiled the European defense landscape of late. For instance, in June Germany decided to cancel the multimillion dollar F126 frigate <\/a>program. In the wake of that move, shares of German defense giant Rheinmetall dropped by as much as 20 percent, a 15-month low, cutting \u20ac11 billion from its market value, per Reuters<\/a>. <\/p>\n Capital Alpha Partners, a forecasting firm, said in an investor note on June 26 that the prior week had been a \u201crough\u201d one for European defense stocks generally. Among other potential reasons for the Rheinmetall downturn it said, was a decision made across the Atlantic when the House Appropriations\u00a0Defense\u00a0Subcommittee (HAC-D) cut the Army\u2019s XM-30 armored vehicle program in its markup of the FY27 DoD budget, which Rheinmetall\u2019s US division is chasing. <\/p>\n Additionally, reported defense spending belt-tightening on the part of Italy \u201cmight\u201d explain financial \u201cweakness\u201d faced by local defense suppliers including Leonardo and Fincantieri, Alpha\u2019s assessed. <\/p>\n