The owners of German chemicals firm Evonik may pull the plug on an initial public offering (IPO) which, when announced, was billed as Europe's biggest flotation in more than a year.

"The performance of financial markets since the end of May has added to the uncertainty whether enough proceeds are achievable that reflect the value of Evonik," the RAG Foundation said in a statement on Sunday.

"The certainty of a flotation based on an appropriate valuation of Evonik is a prerequisite of the IPO."

RAG owns 75% of Evonik while private equity firm CVC owns 25%.

A string of flotations across the world have been blown off course by volatile financial markets, amid fears the euro zone debt crisis is dragging down global economic growth. Earlier this month motor sport racing company Formula One delayed a Singapore IPO worth up to $3 billion.

Should RAG formally abandon the flotation, it would be the second time that Evonik has pulled an IPO. RAG said in April last year it was preparing for an IPO of Evonik, but put the plans on ice in September due to weak markets at that time.

Sources close to the matter have told Reuters that Evonik's owners hope the IPO will value the chemicals group at €15 billion, after subtracting 1 billion in net debt.

That assumes a multiple of at least 6.5 times earnings before interest, tax, depreciation and amortization.

According to two people on RAG's board, investors are not willing to pay anything close to that and are rather looking at a multiple closer to 5 and a valuation of around €12 billion.

Another meeting of RAG's board is planned for June 18, a day after elections in Greece that are eagerly anticipated by markets worldwide as they try to gauge whether the country will be able to stay in the euro zone.

If banks haven't convinced investors to pay more money for Evonik's shares, RAG's board is expected to abandon the IPO then.

Sources close to the matter have said Evonik is looking to raise as much as €5 billion, which would be the biggest IPO in Europe since commodities trader Glencore's $10 billion flotation in May 2011.

RAG, a state-owned trust that will bear the liabilities of Germany's wound-down coal mines, had previously signalled a possible delay of the IPO due to market turmoil.

Deutsche Bank and Goldman Sachs are joint global coordinators and joint bookrunners for the offering. BofA Merrill Lynch, Credit Suisse and J.P. Morgan are mandated as additional joint bookrunners.