competitor shelves ipo plans

SYDNEY--Debt collecting business ACM Group has shelved plans to raise up to 300 million Australian dollars (US$271 million) in an initial public offering in the first half of
this year, three people familiar with the situation said.
ACM, which appointed UBS AG and Macquarie Group in August last year to explore an IPO, is owned by prominent racing identity Bert Vieira. It buys bad debts including credit
card, personal overdraft debt and phone accounts, from clients including Telstra Corp.
(TLS.AU), National Australia Bank Ltd. (NAB.AU), Westpac Banking Corp. (WBC.AU), and Commonwealth Bank of Australia Ltd. (CBA.AU). Mr Vieira, who turned 64 in January, told The Wall Street Journal last August that "I'm not getting any younger, and the IPO will allow me to reward some of my
long-standing staff by issuing them shares."
ACM had hoped to join competitors like Collection House (CLH.AU) and Credit Corp. (CCP.AU) on the Australian Securities Exchange. Shares in Collection House rose 27.7%
last year, while Credit Corp. fell 2%. The cyclical nature of debt collecting means that the profit recovered from bad debts can fluctuate wildly. Corporate clients are less likely to sell claims in arrears at a steep discount when the economy is stable, reducing margins for groups like ACM, one of the people said. That's a challenge for some institutional investors seeking steady income and dividends from IPOs, he said.
ACM suffered a setback in late 2012 when the Federal Court of Australia found the debt collector had engaged in "widespread" and "systematic" misleading and deceptive conduct through its recovery operations. The case was brought by the Australian Securities and Investments Commission, the country's securities regulator, on behalf of eight debtors.
The court found ACM had threatened to call friends, employers and neighbors of debtors, block their overseas travel and turn up to their workplaces in marked cars. ACM was ordered to pay ASIC's costs in the case.
Paul Brabazon, ACM's chief operating officer, said late Monday that discussions with advisors UBS and Macquarie were progressing. He declined to comment on other possible exit options for Mr. Vieira.