Adnoc may raise $2.8 billion in IPO

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Dubai – Abu Dhabi National Oil Company (Adnoc) is expected to offer up to 20 per cent and raise around $2.8 billion of its fuel distribution unit to investors, according to media reports. Adnoc distribution arm manages petrol stations and convenience shops across the UAE.

Adnoc is offering a minimum stake of 1.25 billion shares, or 10 per cent, up to a maximum of 2.5 billion shares, according to a Nov. 20 filing to the Abu Dhabi Exchange (ADX). The offer price range is due to be announced on November 26.

Analysts believe that if the initial public offering (IPO) is well-received by investors, it could be the first of a number of listings in the region.

The national oil company also plans to raise a $2.8 billion loan for its distribution unit prior to selling the stake, according to media reports.

The drop in oil prices in recent years has pushed many Gulf governments to consider listing parts of its state-owned companies to bolster their finances.

Abu Dhabi-based Emirates Global Aluminium is expected to list next year while Saudi Aramco is reported to be on track to offer 5 percent of the company in late 2018, in a listing that could raise as much as $100 billion.

Aramco has yet to confirm the location of the listing, with international financial centers such as London and New York vying for the opportunity.
Plans to list at least 10 per cent of Adnoc’s distribution arm were announced on November 13 during the ADIPEC oil and gas event in Abu Dhbai, during the opening address by Sultan Ahmed Al-Jaber, UAE Minister of State and ADNOC Group CEO.

“This marks a major milestone in our history and a significant step-change in our transformation. Importantly, it also signals a new chapter in the growth and development of the UAE’s capital markets,” he said.

“But to be clear, ADNOC at a holding company level, will always remain wholly owned by the Abu Dhabi government,” he added.

The listing would also support the company’s growth plans and the government’s 2030 economic vision, said Al-Jaber. The oil company is aiming to increase its upstream production capacity to 3.5 million barrels per day as well as upping its crude refining capacity by 60 percent and more than tripling its petrochemical production. – abdulbasit@theuaenews.com