SAO PAULO, Feb 9 (Reuters) - Ouro Verde Locação e Serviço SA , a Brazilian machinery rental company, on Monday scrapped plans to go public on the São Paulo Stock Exchange as market conditions locally and abroad deteriorate.
In a securities filing, the Curitiba, Brazil-based company asked securities industry watchdog CVM to cancel an Oct. 14 request to sell common shares in an initial public offering. The company had delayed a similar plan in August.
Companies looking to debut in Brazil’s stock market, like Ouro Verde, face a delicate juggling act - how to offer manageable risk and attractive returns to investors in an environment where political, economic and financial uncertainty is escalating.
Brazil’s economy is flirting with recession and accelerating inflation. In addition, allegations that the ruling Workers’ Party obtained billions of reais in illegal donations from contractors of state-controlled Petróleo Brasileiro SA are weighing down popular and congressional support for President Dilma Rousseff’s administration.
Stung by dozens of deals that failed to deliver the promised returns in recent years, investors have become cautious about Brazilian offerings. In 2014, only one company went public on the São Paulo Stock Exchange, the worst performance for domestic IPOs in 11 years.
Ouro Verde had hired Itaú BBA to manage the transaction, alongside joint bookrunners Credit Suisse Group AG , Banco Santander SA and HSBC Holdings Plc . (Reporting by Guillermo Parra-Bernal; Editing by Cynthia Osterman)