GrafTech IPO nets Brookfield smaller-than-expected windfall: Reuters

GrafTech International Ltd raised US$525 million in its U.S. initial public offering on Wednesday, a source familiar with the matter said, netting owner Brookfield Asset Management a smaller-than-expected windfall.

GrafTech manufactures graphite electrodes used in the production of steel. The underwhelming IPO investor reception illustrates that concerns about the volatility of its business persist, even as steel tariffs announced by U.S. President Donald Trump last month were expected to buoy its fortunes.

GrafTech priced its IPO at US$15 per share, the source said, well below the targeted range of US$21 to US$24 per share. The Brooklyn Heights, New York-based company also sold only 35 million shares, slightly fewer than the 37.8 million shares originally planned. The IPO pricing gives GrafTech a market value of around US$4.5 billion.

GrafTech and Brookfield declined to comment.

Brookfield bought GrafTech for around US$1.3 billion, including debt, in 2015, when the steel industry was struggling with a slump in prices due to record exports by China.

All of the net proceeds from the IPO will go to an affiliate of Brookfield and Brookfield Business Partners LP, GrafTech said in its IPO prospectus.

GrafTech is scheduled to make its New York Stock Exchange debut on Thursday under the symbol “EAF”.

JPMorgan Chase & Co and Credit Suisse Group AG are the lead underwriters of the offering.

(Reporting by Joshua Franklin in New York; Editing by Tom Brown and Chris Reese)

Photo courtesy of Reuters/Mike Segar