Sunrise Communications IPO Plan Not Hurt by Swiss Franc Strength

By John Revill 

ZURICH--Sunrise Communications Group AG's plan to launch the biggest European telecoms initial public offering seen in recent years won't be derailed by the Swiss franc's surging value and a corresponding fall in the value of Swiss stocks, the company said Tuesday.

Zurich-based Sunrise, Switzerland's second-biggest telecommunications company by revenue, said it is setting its IPO price in the range of 58 Swiss francs to 78 francs a share, with the aim of raising 1.35 billion francs ($1.5 billion). The IPO would be the largest for a European telecom since 2012, according to Dealogic.

Sunrise said the price range implies a market capitalization for the company of between 2.8 billion francs and 3.3 billion francs, when its stock begins trading on or before Feb. 6.

Sunrise announced its decision to go public on Jan. 14, the day before the Swiss National Bank abruptly ended its long-standing cap on the country's currency at 1.20 francs to the euro. Since then, the franc has gained nearly 17% in value against the euro while the blue chip Swiss Market Index has declined nearly 10%, amid concerns that Switzerland's many export-reliant firms will see their costs surge.

Sunrise Chief Executive Libor Voncina told reporters on Tuesday that the revaluation of the franc against the euro could have a positive impact on his company, which has much of its debt denominated in euros while revenue is denominated in the strengthened franc.

The company had revenue of 2.02 billion francs in 2013.

Sunrise's Chief Financial Officer André Krausé said that shares in Swisscom AG, Switzerland's only publicly traded telecommunications company, haven't been hurt by the currency swing.

Shares in Swisscom have risen more than 1% in the past 10 days.

Private-equity firm CVC Capital Partners, which has held a 90% stake in Sunrise since 2010, will likely see its ownership decline to around 35% as a result of the IPO.

Write to John Revill at [e-mail]

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