Safety fears delay IPO timetable for fatal crash tanker firm
McAleese Transport has delayed plans to raise $155 million from investors after more of the transport operator's vehicles were taken off the road on Wednesday following a fatal fuel-tanker crash in Sydney last week.
While the company expects to push ahead with its sharemarket listing, doubts remain over whether it can still win support from investors who have expressed serious concerns over the company's safety record.
The Mark Rowsthorn-chaired McAleese Transport had been undertaking a roadshow among institutional investors in a bid to win support for its $155 million share listing.
But on Wednesday it emerged that the company had delayed its initial public offer timetable after nearly 100 tankers in its oil-hauling business, a division called Cootes Transport, were grounded in the last week by road authorities in NSW and Victoria. Cootes represents up to a third of McAleese's overall revenue, according to figures presented to fund managers.
The decision to ground the trucks came after one of Cootes' fuel tankers crashed in Sydney's northern beaches last week, killing two people and injuring five.
By Wednesday, NSW and Victorian authorities had grounded a total of 89 trucks belonging to Cootes Transport - including fuel and LPG tankers - with 79 from Victoria and 10 from NSW.
Authorities said 34 of the trucks grounded in Victoria have since been issued with roadworthy certificates.
Investors on Wednesday raised serious questions about McAleese's decision to delay its IPO timetable rather than withdraw it altogether.
One fund manager said there was a lot of interest in the IPO two weeks ago, but "people won't even want to be on the register if it comes to the market now".
"I find it astonishing that they haven't pulled it and said, 'We'll come back in 12 months' time or once we've got everything in order'," he said.
"Their safety record is still going to be in question in two weeks' time. If they go through and spend a lot of money in the next 12 months on safety and maintenance and come back to the market after that, well, maybe people will give them the benefit of the doubt, but right now I don't know who would invest in this thing."
Wilson Asset Management's Geoff Wilson described as sensible the decision by McAleese to delay its IPO. But he also said he would still support the IPO when it occurs. "It's logical what they're doing after what happened," Mr Wilson said. "[It's better] to delay it by a couple of weeks until the uncertainty's been removed."
On Monday, a McAleese spokesman confirmed that the company was sticking to its plan to raise $155 million from investors this week, before pushing to list on the stock exchange in November.
A spokesman for McAleese did not return calls on Wednesday.