Bilt Paper's $330m London IPO plans on hold

Ballarpur Industries, has put on hold a planned USD 330 million London listing of its Bilt Paper unit, saying an acquisition of a rival by a US company could lead to a rerating of the Indian paper industry.

US paper and packaging company International Paper Co agreed on Tuesday to buy a majority stake in Andhra Pradesh Paper Mills (APPM), India's third-largest paper company by market value, for about USD 257 million.

"It is important to study the impact of this acquisition valuation over the next few months, and the potential rerating possibilities, as against the IPO valuation in London at this time which is dependent on the current UK IPO market sentiments," the Ballarpur said in a statement.

The company will revive the IPO plans in the next two- three months, group finance head B Hariharan told Reuters.

"Unless we get a substantial increase in valuation or a significant increase in valuation in India, we will not look at listing," he said.

Ballarpur owns a 79.5% stake in Bilt Paper, part of the Mumbai-based Avantha group, with the remainder held by private equity investors JPMorgan Mauritius and Lathe investment.

The delay in IPO will not have any impact on the company's expansion plans, and will only slightly impact debt reduction plans, Hariharan said by phone.

The maker of writing and printing paper had plans to use around USD 170 million of the IPO proceeds to fund its capital expansion, and around USD 140 million to reduce the company's long-term debt.

By 01:00 p.m. (0730 GMT), shares of Ballarpur, valued by the market at USD 533 million, were trading down about 1.79% at Rs 35.65 in a subdued Bombay Stock Exchange.