CoverGirl cosmetics maker Coty Inc said on Tuesday it would withdraw from the planned initial public offering of its Brazilian unit, blaming adverse financial market conditions in the South American country.

The company had announced plans to publicly list the unit in August, aiming to use the proceeds to pay down debt and expand its business.

“In light of the current economic volatility and adverse financial market conditions in Brazil, we have decided to withdraw from the IPO registration application process for the time being,” said Laurent Mercier, Coty’s chief financial officer, on a call with analysts.

Mercier said the company would monitor market conditions to potentially pursue an IPO at a later date.

The Brazilian economy, weakened by high inflation and unemployment, is in danger of sinking deeper into recession this year ahead of October’s presidential election, as anxiety over the vote and steep interest rate rises continue to hurt growth, a Reuters poll showed in January.

Separately, Coty raised its profit expectations for the year, benefiting from its focus on high-margin skincare products.

By Ananya Mariam Rajesh and Uday Sampath; Editor: Amy Caren Daniel

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