London : European companies are attempting the biggest initial public offerings in three years just as sovereign-debt downgrades spur the most market turmoil since the collapse of Lehman Brothers Holdings Incorporated.

While Madrid-based flight-reservations provider Amadeus IT Holding and Poland's PZU priced IPOs worth $4.5 billion (Dh16.5 billion) last week, companies from Essar Energy, UralChem Holding, Grupo T-Solar Global and Kuzbass Fuel postponed or reduced their offerings.

While IPOs in the region are raising more than in the US this year, Barclays Wealth, Baring Asset Management and Clariden Leu say Europe's debt downgrades may damp demand or drive companies to offer concessions to buyers. European stocks had the biggest slump in five months after credit ratings for Greece and Portugal were cut.

Risk aversion

"It's going to be a tough environment," said Michael Dicks, the London-based head of research at Barclays Wealth, which oversees $230 billion. "The sweet spot for these riskier deals was probably before the sovereign-debt news came back. These problems are not just going to go away."

Essar Energy, a unit of India's Essar Group, yesterday cut the price for its London IPO below the initial range, while Moscow-based fertiliser producer UralChem postponed its share sale in London on Thursday.

The VStoxx Index, a gauge of options to protect against losses on the benchmark Euro Stoxx 50 Index, rose as much as 40 per cent in the two days ended April 28, the most since October 2008, a month after New York-based Lehman failed in the largest ever bankruptcy.

European companies have raised more than $11 billion in IPOs this year, exceeding 2009's $7.7 billion total and the $6.5 billion from the US. The amount for Europe is the most for the first four months of any year since 2007. Almost 85 per cent of Europe's offerings this year were completed since March, as the Stoxx Europe 600 Index rallied as much as 15 per cent from its February low.

Amadeus, the flight-reservations provider controlled by BC Partners and Cinven, sold 1.32 billion euros (Dh6.41 billion) of shares on April 27, the biggest IPO in Spain since Valencia-based Iberdrola Renovables's 4.48 billion-euro deal in 2007.

Stocks stumbled last week after Standard & Poor's lowered Greek debt to junk and cut Portugal by two steps. The Stoxx Europe 600 gauge slumped 3.1 per cent on April 27, the biggest drop since November, and extended its decline after Spain's rating was reduced a day later.