Spain's Cepsa latest to shelve IPO; turbulent market conditions blamed
By Abigail Townsend
Date: Monday 15 Oct 2018
(Sharecast News) - Spain's Cepsa has shelved plans for a multi-billion euro initial public offer, after it fell foul of the current turbulence on European bourses.
Cepsa's owners, the Abu Dhabi state investment vehicle Mubadala, had planned to list 25% of the oil company in Madrid, raising around E2bn.
But in a statement on Monday, Mubadala said: "The most recent international economic developments have sowed considerable uncertainly in international capital markets. In this 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 company has not ruled out an IPO when market conditions improve, but did not provide details on timings.
Global equities have been buffeted in recent weeks, as investors worry about an escalating US-China trade war, the ongoing uncertainty over Brexit, and higher US interest rates. On Monday, the FTSE 100 was trading at six-month lows as it dipped below the 7,000 mark, while the Stoxx 600, which tracks Europe's biggest companies, is at a 22-month low.
Nor is it only in Europe, with Asian and US markets similarly affected. On Wall Street, last week the Dow Jones Industrial Average lost 800 points in one session, its worst day for eight months.
Cepsa joins a growing number of IPOs that have been pulled as a result of the turmoil. They include Dutch fleet operator LeasePlan, which blamed market conditions when it ditched its IPO last week, and Portugal's Sonae. It cancelled plans last week to float its retail unit, also blaming poor market conditions.
Tencent Music Entertainment Group, the music streaming arm of Chinese digital giant Tencent, is also reported to be considering postponing its US IPO, although the company is yet to comment on its plans.
Earlier in the year, London listings were postponed by UK vaping liquids manufacturer Supreme and Africa-focused mobile phone mast outfit Helios Towers.
The biggest of them all, Saudi Aramco insisted in August that it still intends to pressing ahead with its £1.5tn flotation, "mostly likely" next year.
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