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Abu Dhabi, UAESaturday 17 November 2018

Mubadala intends to revive plans to list Cepsa in better market conditions

The IPO was delayed earlier this month due to a “jittery” market

Chief executive of Mubadala Investment Company onstage at the opening ceremony of the Future Investment Initiative conference in Riyadh, Saudi Arabia. AFP
Chief executive of Mubadala Investment Company onstage at the opening ceremony of the Future Investment Initiative conference in Riyadh, Saudi Arabia. AFP

Abu Dhabi’s strategic investment firm, Mubadala Investment Company, intends to revive its plans to list shares of its fully-owned Spanish oil and gas subsidiary Cepsa once market conditions are better, its chief executive said.

“We will wait for the right time,” Khaldoon Al Mubarak, the chief executive and managing director of Mubadala told delegates on the first day of the Future Investment Initiative (FII) conference in Riyadh on Tuesday. “When we see the market is back … our intention is to go back to the market.”

Cepsa delayed plans to list its shares on Spanish stock exchanges earlier this month 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.

It was scheduled to announce the pricing of the 25 per cent listing of its shares on October 16, but pulled the issue back at the last minute.

“In September, the interest was strong, markets were actually very attractive, and we took the decision to IPO,” Mr Al Mubarak said. “By the time we were about to hit the market, it became quite problematic … the market became jittery.”

As an investor, Mubadala continues to examine its portfolio to decide which of its assets are ripe for monitisation, and the decision to list Cepsa shares was part of that exercise, he said, adding that delaying the deal was purely a commercial decision.

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Even though the market conditions deteriorated significantly, the feedback from potential investors was positive, Musabbeh Al Kaabi, chief executive of Mubadala’s Petroleum & Petrochemicals platform, said at the time of postponement of Cepsa’s IPO.

Global equity markets were rocked before Cepsa’s issue, with the S&P 500 index and Europe’s main equity gauge plunging sharply. Shares across Asian markets also slumped as US treasury yields climbed and the impact of escalating trade tensions on the global economy spooked investors.

In terms of Mubadala’s international investments, Mr Al Mubarak said the company has a very “careful” approach to its international asset allocation under its five-year rolling programme.

The firm, which has invested $15bn in Softbank’s $93bn Vision Fund and has set up an office in Silicon Valley to pursue venture capital deals, is in the midst of its current five-year cycle and will continue to look at technology sector investments.

“When it comes to technology, one has to embrace it rather than fight it. We have to accept the world is changing, technology is coming and coming in fast,” he said. “We believe in a large way in that sector and we are invested heavily. We have committed significant capital in that space.”

Mubadala, he said, has partnered with Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, in close to 50 transactions and has also co-invested with Russia’s Direct Investment Fund in more than 35 deals in different sectors.

These are “successful” partnerships, he told the delegates.