HONG KONG/NEW YORK (Reuters) – Anheuser-Busch InBev (ABI.BR) said on Friday it will not proceed with the planned listing in Hong Kong of its Asia Pacific unit, Budweiser Brewing Company APAC Ltd (1876.HK), in what would have been the world’s biggest initial public offering of 2019.

The IPO was considered a barometer for future large share sales. AB InBev, the world’s largest brewer, had aimed to sell as much as $9.8 billion in stock to raise raised much-needed funds for the company to cut its debt heavy burden.

The canceled IPO is also a big setback to the Hong Kong stock exchange, which had hoped Budweiser’s listing would help attract other high-profile international companies.

AB InBev said the decision was due to “several factors, including the prevailing market conditions.” The company’s stock was down around 4% in after-market trading.

The cancellation, against the backdrop of a protracted U.S.-China trade war, sets a downbeat tone for large Hong Kong listings.

Budweiser APAC, whose portfolio of more than 50 beer brands includes Stella Artois and Corona, had received offers for shares within its targeted range from hedge funds and private wealth managers, but some large long-only U.S. investors, which are often prioritized in an IPO, made offers below the HK$40 per share level, people familiar with the matter said.

The shares were being sold in an indicative range of HK$40-HK$47,

IPOs on Hong Kong exchanges are only able to price up to 10% below the target range without regulatory approval if the risk is flagged in the prospectus.

This was not sufficiently highlighted in the Budweiser filing so AB InBev held firm on the HK$40 price, meaning some U.S. investors trimmed the size of their orders, sources said.

HIGHLY LEVERAGED PARENT

The company’s executives and representatives from the deal’s co-sponsors, JPMorgan (JPM.N) and Morgan Stanley (MS.N), met in New York to discuss pricing after the books closed on Thursday.

People familiar with the issue said it was struggling to secure enough demand from long-term investors.

Typically investors put in orders for more shares than they actually expect to receive in an effort to ensure they get a good allocation. Deals where those investors end up with more than they expected often trade poorly to begin with.

All the sources who spoke to Reuters did so on condition of anonymity as they were not authorized to speak on the matter.

Budweiser APAC was seeking to raise between $8.3 billion and $9.8 billion through the float, much of which was to go toward paying down debt at its highly leveraged parent.

AB InBev has been working to reduce a debt pile of more than $100 billion that it built up with the purchase of nearest rival SABMiller in late 2016.

Trading had been set to begin on July 19.

AB InBev cut its dividend for 2018. It has said it will reduce its net debt-to-EBITDA ratio to below 4 by the end of 2020 from 4.6 at the end of last year, saying it is not dependent on the Asian flotation. It puts the optimal ratio is 2.

AB InBev stock, which has rallied 36% this year, is still down 11% over the last 12 months. It fell 1.5% on Friday.

The company had positioned its Hong Kong listing as creating a champion in Asia-Pacific, where sales are growing as increasingly wealthy consumers turn to premium beer brands. Even at the low end of the price range, the IPO would surpass the $8.1 billion New York float of Uber (UBER.N) in May, the biggest so far this year, Refinitiv data shows.

The IPO was set to precede Alibaba’s plans to raise as much as $20 billion through a Hong Kong listing.

Last month, logistics real estate developer ESR Cayman Ltd (1821.HK) shelved its Hong Kong IPO of up to $1.24 billion “in light of the current market conditions.”