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The international financial crisis has claimed another New Zealand victim, with Christchurch-based Flight Experience Group shelving its plans for a sharemarket listing.
The company, which has several high-profile backers, including mortgage broking maven Mike Pero and Sky TV founder Craig Heatley, has been hinting for nearly a year that it was considering a listing to raise more capital.
The company has developed a low-cost flight simulator for recreational use and professional pilot training.
It already has entertainment franchises in Australia, Singapore and Hong Kong, as well as in New Zealand, and has also struck its first deal with a flight training school owned by Dubai Aerospace.
The company claims to be expanding fast, and as recently as Tuesday this week, Pero was insisting the float was imminent.
"It will definitely take place in the next 12 months. Even in a low tide, you can still float a boat," he said.
But yesterday, Pero confirmed the company had decided to seek more private equity instead.
The listing would have been the first initial public offering since Uruguay Farming Systems last December.
It is understood ABN Amro has been advising the company.
NZX chief executive Mark Weldon confirmed it was unlikely there would be any IPOs this year.
"It's not just a New Zealand issue, it's a global issue. Listings on [London's] AIM have completely stopped, and listings on the NYSE have virtually stopped, except for people who are trying to bail out of businesses, or raise capital for other businesses."
Weldon said he was confident there would be new listings next year, and in subsequent years, given the credit crunch.
"As far as private equity and trade sales are concerned, we're no longer going to see such stupendous prices, with massive amounts of debt. It's actually going to make equity markets very attractive."
It's been a tough few months for Pero.
TradeRunner, the business he launched last year to manage TradeMe listings on behalf of buyers and sellers, was closed down last month.
And his private airfreight business, Jet Express, has just lost its only major contract, with transtasman airline Pacific Blue. However, it will continue as an airfreight broking business.
He has also pulled out of a deal, announced last November, to invest in the Hilton Rarotonga Resort & Spa.
He insisted yesterday he remained optimistic. Flight Experience was going "particularly well", and he was confident economic conditions would improve.
Pero helped establish Flight Experience following his disastrous investment in regional airline Origin Pacific, which collapsed in 2006.
He sold down his majority shareholding last year, when private equity firm Ocean Partners bought half of the company, in a deal believed to be worth close to $15 million.
The deal was brokered by Christchurch merchant banker Tim Howe, who also helped Pero sell Mike Pero Mortgages in 2004 for a similar amount.
According to information given to potential investors, Flight Experience is seeking $2 million to enable it to defer listing until market conditions improve.
The money will be used to boost sales and marketing, build more simulators, and fund a British branch. It is also offering a seat on the board to someone with relevant experience.
