By Doug Alexander and Sean B. Pasternak

June 1 (Bloomberg) -- Porter Aviation Holdings Inc., owner of the Toronto-based airline that was formed in 2006, postponed its C$120 million ($114 million) initial public offering after stock prices dropped.

“We believe it is prudent to defer the offering,” President and Chief Executive Officer Robert Deluce said today in a statement. “Our company is well-positioned to wait until the equity markets stabilize before deciding whether to proceed with a new public offering.”

Porter initially planned to sell 17.1 million to 20 million shares for C$6 to C$7 each, before cutting the price to C$5.50 a share last week and delaying the IPO until today. Canada’s benchmark Standard & Poor’s/TSX Composite Index has dropped 5.2 percent over the last 30 days, the biggest monthly drop since March 2009.

At least 20 companies worldwide postponed or withdrew IPOs in May as the European debt crisis sent the MSCI World Index of developed-market stocks down 9.9 percent.

Porter would have been Canada’s first airline IPO since Air Canada sold C$525 million in November 2006. Porter planned to use the proceeds from the sale to pay off debt, expand its island terminal in Toronto and potentially add to its 20-plane fleet of Bombardier Inc. aircraft.

RBC Capital Markets, a unit of Canada’s biggest bank, was leading the IPO, along with eight other banks.

Porter was started with about C$125 million from investors including Borealis Infrastructure, which invests for Ontario Municipal Employees Retirement System; EdgeStone Capital Partners; GE Asset Management and Dancap Private Equity Inc. Porter shareholders weren’t selling stock in the IPO.

--Editors: David Scanlan, John Simpson

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net; or Alec McCabe at amccabe@bloomberg.net