Industrial company WE Soda has said it plans to list in London, bringing with it sighs of relief across the City, which was beginning to feel a bit like the ugly sister in the global IPO game. WE Soda manufactures natural soda ash which is used in industrial processes and sustainable solutions.
The listing is expected to value the company at around the £6.4bn mark, which will make it the largest IPO in London this year. Retail investors are expected to have the opportunity to buy shares in the company and should register their interest with their stock broker of choice.
WE Soda has two large production sites in Turkey. It generated $838m of adjusted core earnings from $1.8bn in revenue last year. The company is a recognised international leader in the production of soda ash, having first started production in 2009. It produces around 5m tonnes of natural soda ash and sodium bicarbonate every year.
Products are sold to customers in almost 80 countries. In 2021 WE Soda’s Kazan Soda plant produced a hefty 3m metric tonnes of soda ash and sodium bicarbonate. Most of the rest comes from its Eti Soda plant which uses innovative solution extraction technology.
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Why is the WE Soda IPO important for the London market?
WE Soda’s intention to list on the London Stock Exchange is a boost for the City just as the capital has been left reeling from some high-profile names which have opted for the bright lights of New York instead. By describing the FTSE 100 as being associated with quality and prestige, the company has provided a ray of light for London, with the LSE’s defensive characteristics considered a benefit at a time of uncertainty due to soaring inflation and high interest rates.
“The stock market launch of the industrial materials maker will be the FTSE’s first major IPO this year, but although this is a much-needed drop in a parched landscape, it’s still unlikely to lead to a flood of immediate listings due to the still volatile nature of market sentiment,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Nevertheless, it brings a wash of confidence to London, and raises hopes that the City can capitalise on the UK’s entrepreneurial activity in the sustainable solutions sector.”
Natural soda ash, which the company manufactures is used in a vast range of industrial processes, but crucially applications needed in the energy transition, such as solar photovoltaic glass and the production of lithium carbonate used in EV batteries. It’s estimated the firm could float at a price valuing the company at around £6.5 billion, which would make it the largest launch since GSK listed Haleon [LON:HLM] as a separate company last July.
The intention to include retail investors in the offer, and not just institutional investors must be welcomed as far too many listings in recent years have excluded regular investors from taking part. However, retail investors should be aware that a period of volatility can follow such launches, so they should ensure they are well-diversified before taking up any offer.
