Market rout delays Cepsa’s IPO plans

Mubadala will consider listing the Spanish company when market conditions are favourable

Spanish energy firm Cepsa has shelved its IPO plans. Reuters

Spanish energy company Cepsa, owned by Abu Dhabi’s strategic firm Mubadala Investment Company, delayed plans to list its shares on Spanish stock exchanges citing “adverse market conditions”.

The energy producer was planning the potential €2.02 billion (Dh8.6bn) listing on the Madrid, Barcelona, Bilbao and Valencia bourses, which would have been the largest public offering in a decade by an oil company. Final pricing of the 25 per cent listing was scheduled to be announced on Tuesday.

“As a long-term investor, we will consider returning to the market when we believe conditions are favourable,” said Musabbeh Al Kaabi, chief executive of Mubadala’s Petroleum & Petrochemicals platform, on Monday. “Even though market conditions deteriorated significantly, the feedback from potential investors reinforced our view of Cepsa’s value and the strengths of the underlying business.”

Mr Al Kaabi, who is also a member of the Mubadala Investment Committee, said Cepsa has been and continues to be a significant and valuable part of the Mubadala portfolio.

Global equity markets were rocked last week with the S&P 500 index hitting a three-month low and Europe’s main equity gauge fell to the lowest since December 2016. Shares across Asian markets also slumped as US treasury yields climbed and the impact of escalating trade tensions on the global economy spooked investors.

Companies debuting on stock exchanges usually prefer stable market conditions to avoid volatility in share prices. Car leasing company LeasePlan, last week postponed its share float in Amsterdam, citing market sell-off.

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Cepsa was originally an investment of Ipic, which became part of Mubadala in a merger in 2017. Abu Dhabi has built its stake in Cepsa for years and bought shares held by France’s Total in 2011.

Cepsa operates across five continents and 20 countries. The company, which has more recently entered the renewable energy market, balances Mubadala’s gas-leaning portfolio, with its exposure to oil assets in South America, South East Asia and Kenya, as well as a significant portfolio of chemical assets, notably linear alkyl benzene - which finds uses in the detergent industry.

Spain's Banco Santander, Citigroup, Merrill Lynch and Morgan Stanley were the joint global co-ordinators and joint bookrunners on the planned listing.