(Reuters) – Shares in Swiss telecoms company Sunrise made a solid debut on the stock market on Friday, with the stock climbing above the price at which it was sold to investors.
Sunrise’s shares, which had been sold at 68 Swiss francs each in a flotation which gave the group a market value of 3.06 billion Swiss francs ($3.3 billion), rose 4.4 percent to 71 Swiss francs in early session trading on Friday.
Backed by European private equity fund CVC, Sunrise is raising proceeds of 1.36 billion francs with the listing, which went ahead despite a surge in the Swiss franc after the central bank shocked financial markets by scrapping a cap on the currency against the euro.
Sunrise, which is using Swiss tennis star Roger Federer to promote its brand, has said it plans to use the proceeds of its flotation to pay down debt and step up its challenge to national market leader Swisscom.
“The IPO (initial public offering) was multiple times over-subscribed at the offer price due to strong demand from Swiss and international institutional investors and private clients,” Sunrise said in a statement.
On Thursday, Reuters reported the offering price and that Sunrise had increased the size of its stock market listing by roughly a fifth because of strong investor demand.
In spite of mergers and acquisitions within the telecoms industry, the telecoms sector has seen few new share issues. Europe saw just five telecoms new offerings in 2014, only 0.7 percent of the region’s total issuance, according to Thomson Reuters data.
Both Sunrise and rival Orange Switzerland have struggled to wrest market share from government-backed Swisscom.
They have toyed with a merger in the past, but the plan was blocked by Swiss competition regulators in 2010. Last year, Orange Switzerland was sold by private equity firm Apax to telecoms tycoon Xavier Niel’s NJJ Capital.