SPANISH IPO PLANNED BY CEPSA FOR FOURTH QUARTER

Oil and gas firm is owned by Mubadala Investment Company

Cepsa, an energy company owned by Abu Dhabi’s Mubadala Investment Company, plans to float 25 per cent of its capital on Spanish stock exchanges through what could be the biggest oil company initial public offering in the past decade.

Cepsa operates across the entire oil and gas value chain. The minimum free float of shares after the listing is expected to be at least 25 per cent. The IPO is expected to take place in the fourth quarter of this year, the company said.

In March, The National was first to report that Mubadala was seeking more stakeholders for Cepsa and exploring options to list the company in Spain this year.

“Today’s intention to float is a result of the strong foundations the business has built to become a well-established, integrated energy company and a global leader in a number of important product markets,” Musabbeh Al Kaabi the chief executive of Mubadala’s petroleum and petrochemicals platform said yesterday.

“We are committed to delivering the IPO with a listing on the Spanish exchanges as a natural and strategic fit for Cepsa that will provide wider access to capital markets to support financial flexibility.”

Mubadala’s public offer in Cepsa will involve the Spanish energy company trading on the Madrid, Barcelona, Bilbao and Valencia stock exchanges. Banco Santander, Citigroup, Merrill Lynch and Morgan Stanley are the joint global coordinators and bookrunners on the deal.

Barclays BNP Paribas, First Abu Dhabi Bank, Societe Generale and UBS are the additional joint bookrunners, while Banco Bilbao Vizcaya Argentaria and CaixaBank are the colead managers.

Rothschild is acting as financial adviser and selling shareholder, according to the regulatory filing.

Cepsa, based in Madrid, was originally an investment of Ipic, which merged with Mubadala last year. Abu Dhabi has built its stake in Cepsa for years and bought shares held by France’s Total in 2011.

Mubadala has considered several options for Cepsa including the sale of a stake to strategic shareholders but chose an IPO.

The Cepsa float could raise about €3bn, valuing the company at about €10bn, according to Bloomberg.

Mubadala invests globally and has assets in excess of $200bn, spanning 13 sectors and 30 countries. The company is central to Abu Dhabi’s efforts to diversify its economy away from oil and further strengthen its portfolio investments.

Mubadala has been investing in 90-year-old Cepsa since 1988. Earning revenue from the Cepsa stake through an IPO, the first such international deal for a Mubadala unit, will give Abu Dhabi company more firepower for future acquisitions.

Cepsa, which has 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 portfolio of chemical assets, notably linear alkyl benzene – which finds uses in the detergent industry.

In May, Cepsa signed an agreement with state-controlled Abu Dhabi National Oil Company (Adnoc) to set up a 150,000 tonne per year chemicals project.

The move is part of a broader expansion of Adnoc’s integrated refining and petrochemicals complex in the capital’s western region of Ruwais.

The Spanish company in February won a 20 per cent stake worth $1.5bn in the twin concessions of Umm Lulu and Sarb, which lie offshore the territorial waters of Abu Dhabi.

Cepsa’s recent successes offshore and onshore in the UAE made it “very attractive for many investors”, Mr Al Kaabi said in March.