A day before the planned debut of Covestro – the former Bayer MaterialScience – on the Frankfurt Stock Exchange on Oct. 2, Bayer and its carved-out engineering plastics subsidiary bowed to a worsened capital markets outlook, lowered the target price and postponed the launch by four days.

On Oct. 1 the companies said they now hope to realize €1.5 billion from the sale of shares priced at €21.50-34.50 rather than €2.5 billion from shares priced at €26.50-35.50. To prevent the fledgling standalone company from being saddled with additional debt, Bayer said it would increase its capital contribution by €2 billion. Covestro’s net indebtedness will thus remain unchanged at the previously envisaged €4 billion.

The share launch has now been moved back to Oct. 6.

Since the start of the bookbuilding phase on Sept. 21, Bayer and Covestro said the capital market situation had “deteriorated significantly,” due to external factors such uncertainty over future growth in China – where the plastics producer has invested heavily – as well as the US Federal Reserve’s failure to adjust interest rates. Without expressly mentioning compatriot Volkswagen, they also alluded to “negative headlines from the automotive sector.”

Covestro plans to issue 61.2 million to 69.8 million new shares to investors in Germany and Luxembourg through a capital increase. The number of shares will be aligned with the issue price. With the adjusted parameters, the free float is expected to be in the range of 30.4-33.3% with Bayer holding the remaining shares.