Spanish oil company Cepsa postpones bumper IPO, blames market rout

The Monte Toledo oil tanker delivers a shipment of Iranian crude oil to an offshore pumping station at the Cia. Espanola de Petroleos SA (CEPSA) refinery near Algeciras, a few miles via Gibraltar, on Sunday, March 6, 2016.

Luke MacGregor | Bloomberg | Getty Images

The Monte Toledo oil tanker delivers a shipment of Iranian crude oil to an offshore pumping station at the Cia. Espanola de Petroleos SA (CEPSA) refinery near Algeciras, a few miles via Gibraltar, on Sunday, March 6, 2016.

Spain’s Cepsa postponed what would likely have been the largest oil company listing in a decade on Monday, the latest IPO to succumb to a global sell-off in equity markets.

Cepsa’s owner, Abu Dhabi state investor Mubadala, had planned to raise about 2 billion euros ($2.3 billion) by selling 25 percent of Cepsa.

Markets have been roiled by anxiety about a potential trade war between the United States as well as China, uncertainty over Britain’s exit via the European Union, a global economic slowdown as well as higher U.S. interest rates.

Spain’s IBEX stock market index registered its biggest weekly fall since February at Friday’s close, as well as remains at two-year lows. The index opened down 0.15 percent on Monday.

“The most recent international economic developments have sowed considerable uncertainty in international capital markets,” Cepsa said in a statement.

“In This kind of scenario, 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,” the item said.

Mubadala will consider returning to the stock market when conditions become more favourable, Musabbeh Al Kaabi, chief executive of Mubadala’s Petroleum as well as Petrochemicals platform, said.

“The feedback via potential investors reinforced our view of Cepsa’s value as well as the strengths of the underlying business,” Al Kaabi said in a statement.

Cepsa’s float would likely be the biggest by an oil company in terms of proceeds since Brazil’s OGX Petroleo e Gas in 2008.

IPO plans globally have been hit by market turmoil.

Last Friday alone, Tencent Music Entertainment, the owner of China’s most favorite music app, delayed a U.S. share offering, sources said, as well as Portuguese holding company Sonae cancelled plans to list shares in food retail unit Sonae MC. Dutch car leasing company Leaseplan also shelved plans to float in Amsterdam, blaming a global sell-off in equity markets.

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