CARROLLTON, Texas-CellStar Corp., which provides handset logistics and distribution to carriers, said it will delay its planned initial public offering in China due to the company’s flailing Taiwan operation and the depressed Chinese stock market.
“The listing process in Hong Kong is taking longer than we had previously expected and has resulted in our exploring the possibility of excluding our Taiwan operation from the IPO,” said Terry Parker, chairman of the company’s board. “Our operation in Taiwan has been unprofitable for some time, and the business prospects for the operation continue to be unfavorable.”
The company said its CellStar Taiwan business failed to score a major bid to provide handset distribution and logistics for a major Taiwanese carrier. Thus, the company is considering leaving the business out of its IPO, which would require a revised filing.
Further, CellStar said the Asian stock markets have experienced a recent downturn, and several Chinese companies have recently delayed or reduced the size of planned stock offerings. CellStar said the situation may improve by the fall, but “because the IPO is subject to numerous conditions, there can be no assurance that the IPO will be completed.”
Interestingly, CellStar’s stumbles in China come at a time when the Chinese handset market is experiencing massive growth.
