Shares in Spanish gas transport company Enagas slid on their stock market debut yesterday, suffering the misfortune of starting trade on a day equity markets were getting hammered across Europe.

Enagas, Spain's first IPO in 15 months, saw its shares sink 6.9 per cent to 6.05 euros per share by 1120 GMT as markets across Europe were rattled by U.S. telecoms firm Worldcom's revelation of improper accounting on a grand scale.

Parent company Gas Natural - which is in turn 24 per cent owned by Spanish oil major Repsol YPF - priced its initial public offering for Enagas at 6.50 euros per share, in the lower half of an indicated range, valuing the company at 1.552 billion euros.

"Obviously we have had bad luck by starting to trade today, a date that was already set and could not be changed. We can't look at things minute by minute, rather we have to wait for a longer cycle," Gas Natural Chairman Antonio Brufau told reporters at the Spanish stock exchange.

"Nobody in his right judgment can anticipate how a day like today might end for any stock that trades," he said. "Enagas shareholders are lucky to have a stake in a company that will double its business in five years, which is something few companies can offer in these times."

Britain's BP confirmed that it had paid 77 million euros for a five per cent stake in Enagas via the IPO, which floated 65 per cent of the company.

"BP's investment recognises the importance of the Spanish gas market as the destination for BP's growing international gas supply portfolio and the critical role that Enagas will play in developing Spain's gas infrastructure," it said in a statement.

The IPO price will bring Gas Natural at least 917 million euros pending a "greenshoe" overallotment tranche of 14.1 million shares.

Enagas, a former public monopoly, owns Spain's strategic pipeline and transportation network, regasification plants, and gas storage facilities, attractive assets in Spain's fast-growing energy market. It still controls 97 per cent of the gas transportation market by revenues.

Enagas plans to invest 2.6 billion euros in infrastructure from 2002 to 2006 to meet demand that the Spanish Economy Ministry projects will soar from 18.1 billion cubic metres (bcm) in 2001 to 41.7 bcm in 2010.

Enagas is the first Spanish firm to float since airline Iberia in March 2001.

The listing has been in the works since a Spanish government decree in June 2000 to liberalise Enagas by diversifying its shareholders and limiting any entity to a 35 per cent stake.

The deal has served to reduce the debt burden for Repsol, until recently owner of 45 per cent of Gas Natural, by taking about one billion euros of Enagas debt off Repsol's books.

Repsol has been hit hard by a high debt ratio and exposure to crisis-hit Argentina since it spent $15 billion to acquire Argentine oil firm YPF in 1999.

The sale has enabled Gas Natural to reduce its debt and given it the financial muscle to make investments, Brufau said .

"Our debt ratio drops to something over 30 per cent after the sale of Enagas from 49 per cent before. The deal gives us very significant financial muscle to make investments," Brufau said.

Brufau, who said future investments could be in Europe or North or South America, made clear that any investment would have to offer a profitability of at least four percentage points above the company's cost of capital.

Brufau said the Enagas IPO had been "model" from the demand point of view, both in the retail and institutional tranches. However, he said the stock market had fallen around 20 per cent from when the offer began.

"We set the price at 6.50 euros based on book-building ... We thought 6.50 euros was the most reasonable price which gives Enagas the possibility of rising," he said.