ComfortDelGro shelves its planned Australian IPO for subsidiary

A bus from the Forest Coach Lines, which operates in Northern Sydney and regional New South Wales, in Australia. Photo provided by ComfortDelGro.A bus from the Forest Coach Lines, which operates in Northern Sydney and regional New South Wales, in Australia. Photo provided by ComfortDelGro.

ComfortDelGro has shelved its plan for an initial pubic offering (IPO) of its Australian subsidiary, citing challenging market conditions and the emergence of other strategic options, the Singapore-listed transportation player said in a filing to SGX Wednesday.

“We had initially planned to list CDG Australia by the end of the year, subject to prevailing market conditions. The environment has changed somewhat since then so we are not proceeding with our IPO plans at this time,” Lim Jit Poh, chairman of ComfortDelGro, said in the statement.

“The intent is still to enhance the value of our Australian assets and we will carefully evaluate all strategic alternatives,” Lim added.

ComfortDelGro said the decision to walk away from the planned IPO was on the advise of the deal’s joint lead managers Credit Suisse (Australia) and UBS Australia.

ComfortDelGro Corp. Australia (CDG Australia) operates in six Australian states and territories: New South Wales, Victoria, Western Australia, Canberra, Northern Territory and Queensland. It has a fleet of more than 4.400 vehicles, including buses coaches and ambulances. For 2020, the Australian businesses posted revenue of S$608 million.

The Australian operations will focus on growing via acquisitions, contract renewals and new contracts, the filing said.

In October, CDG Australia had said it was targeting acquisition-led growth across regional Australia as well as identifying a pipeline of expiring bus-service contracts to tender for.

ComfortDelGro said in August it has invested S$1.17 billion in Australia so far, making it the group’s largest overseas investment destination, the filing said.