Reuters: Private Equity: Germany's RAG threatens to pull plug on Evonik IPO

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Germany's RAG threatens to pull plug on Evonik IPO Jun 10th 2012, 15:38 FRANKFURT, June 10 | Sun Jun 10, 2012 11:38am EDT FRANKFURT, June 10 (Reuters) - The owners of German chemicals firm Evonik may pull the plug on what could have otherwise been Europe's largest initial public offering in more than a year. "The performance of financial markets since the end of May have added to the uncertainty whether enough proceeds are achievable that reflect the value of Evonik," said the RAG Foundation in a statement on Sunday. "The certainty of a flotation based on an appropriate valuation of Evonik is a prerequisite of the IPO." RAG owns 75 percent of Evonik while CVC owns 25 percent. Sources close to the matter have told Reuters that the owners hope the IPO would value the entire chemicals group at 15 billion euros, after subtracting 1 billion in net debt. They added that Evonik could seek to raise as much as 5 billion euros ($6.3 billion) for owners and private equity firm CVC, which would be the biggest IPO in Europe since commodities trader Glencore's $10 billion flotation in May 2011. RAG, a state-owned trust that will bear the liabilities of Germany's wound-down coal mines, had previously signalled a possible delay of the IPO due to market turmoil. (Reporting by Ludwig Burger and Matthias Inverardi; Writing by Christiaan Hetzner; Editing by Jon Loades-Carter)

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