Abu Dhabi to sell over 25 percent of Spain's Cepsa

Abu Dhabi's state investor plans to float at least 25 percent of Spain's Cepsa by the end of 2018, the energy company announced Monday, in what would be the largest listing in a decade on the Madrid stock exchange. Cepsa, which operates across the entire oil and gas value chain, did not say how much the deal would be worth, but market sources said the listing could value the firm at around 10 billion euros ($11.6 billion).
Spanish business daily Expansion said the listing, which is subject to market conditions, is set to be the biggest Spain has seen in a decade. Cepsa has since 2011 been wholly owned by Abu Dhabi's state investor Mubadala, whose vast portfolio also includes stakes in private equity firm Carlyle, telecoms company Etisalat Nigeria and gas firm Emirates LNG.
XTB analyst Joaquin Robles said Mubadala had chosen the timing of the listing "very well" since Spanish investor appetite is high, amid strong economic growth while oil prices have rebounded.
Oil topped $80 a barrel in May for the first time since 2014, boosted by Opec-led output cuts and falling Venezuelan and Libyan output, as well as by an imminent drop in Iranian exports as US sanctions return.
While a barrel hovered around 478 dollars on Monday, he predicted it could once again top $80 dollars a barrel "in the coming months".
"We are proud of our partnership with Cepsa, which is a strategic energy investment for Mubadala and a national industrial champion for Spain," said Musabbeh Al Kaabi, head of petroleum at Mubadala.
The planned listing on the Madrid stock exchange is "a natural and strategic fit for Cepsa that will provide wider access to capital markets to support financial flexibility," he added in a statement.
Abu Dhabi's sovereign wealth fund IPIC in 2011 bought the remaining 48.8 percent of Cepsa shares which it did not already own from France's Total for 3.7 billion euros. Last year IPIC merged with Mubadala.
The vast majority of the United Arab Emirates' crude oil reserves are located in Abu Dhabi - capital of the Gulf emirate. Cepsa posted a net profit in accordance with International Financial Reporting Standards (IFRS) of 441 million euros during the first half of 2018, a 7.0 percent increase over the previous year.
The company is mainly active in oil refining and distribution in Spain but it is also active in oil and gas exploration and production in Latin America and North America.