Chinese pork giant WH Group which bought U.S.-based Smithfield Foods last year is postponing plans for a multi-billion dollar Hong Kong initial public offering (IPO) because of a contraction in investor interest amid difficult financial markets. Upon consultation with its joint sponsors, it was decided that deteriorating markets conditions and the excessive volatility currently being experienced by the sector has precluded an IPO at this time. The spread of porcine epidemic diarrhea virus in the U.S. has killed millions of young pigs in the U.S. driving up pork prices, while at the same time Chinese pork prices have fallen to their lowest point in years because of oversupply. The decision to not move forward complicates WH Group’s goal of paying down loans acquired upon the US$4.7 billion purchase of Smithfield Foods in 2013.
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