Cepsa, the Spanish energy company fully owned by Abu Dhabi’s Mubadala Investment Company, will see a delay in a planned initial public offering, as volatile equity markets impact valuation and investor appetite shrinks.
Global equity markets took a tumble in recent days as global tensions from a U.S.-China trade war, weakening Chinese economic growth and higher U.S. borrowing costs triggered massive sell offs.
“The instability suffered by the markets affects the valuation of the company,” Cepsa said in its website statement.
The company had planned to list 25 per cent of its stake on a Spanish stock exchange and said earlier this month it expects to raise €2.02 billion (Dh8.6bln)
MSCI’s broadest gauge of the world’s stock markets was down 0.25 per cent on Monday after a significant 3.87 per cent decline last week - its biggest since March - to a one-year low, according to Reuters data.
Cepsa said the most recent international economic developments have sowed considerable uncertainty in international capital markets and the appetite of international investors has retracted significantly, along with their willingness to participate in stock market listings such as the one being carried out by Cepsa.
“Even though recent market conditions deteriorated significantly, the feedback from potential investors reinforced our view of Cepsa’s value and the strengths of the underlying business,” said Musabbeh Al Kaabi, CEO of Mubadala’s Petroleum & Petrochemicals platform and a member of the Mubadala Investment Committee.
“As a long-term investor, we will consider returning to the market when we believe conditions are favourable,” he said, adding that Cepsa is a significant and valuable part of the Mubadala portfolio.
The process of presentations to analysts and potential investors, in the current unfavourable conditions of the market, has reinforced Mubadala’s perception of Cepsa's value, the solidity of its strategic Plan 2030, its outstanding position of leadership in the market and its growth potential, the company said.