Abu Dhabi’s main energy company will sell a 15% stake in its maritime logistics unit in an initial public offering, kicking off the second listing of one of its businesses this year.
(Bloomberg) — Abu Dhabi’s main energy company will sell a 15% stake in its maritime logistics unit in an initial public offering, kicking off the second listing of one of its businesses this year.
Abu Dhabi National Oil Co.
will offer about 1.11 billion shares in Adnoc Logistics & Services, it said in a statement on Wednesday. The company will announce the price range and start taking investor orders on May 16, with final pricing slated for May 25.
Shares are expected to begin trading June 1.
The sale comes months after state-owned Adnoc raised $2.5 billion in the listing of its gas business, which is the world’s second-biggest IPO of the year so far.
The company has also sold stakes in some other portfolio businesses over the past two years — including in its drilling unit, chemicals firm Borouge and fertilizer company Fertiglobe.
Those share sales came amid a rush of listings in the Persian Gulf, which has remained a relatively busy market amid a global slump.
Still, oil prices have come off their highs reached last year in the wake of Russia’s invasion of Ukraine. Fears of a recession and bank failures in the US have recently put pressure on the commodity, which strongly influences Gulf stock markets.
About $3.5 billion has been raised so far in 2023 through listings in the Middle East — the bulk of it in Abu Dhabi, data compiled by Bloomberg show.
That’s down sharply from the $11.4 billion fetched by this time last year, as markets like Saudi Arabia have remained quiet and there haven’t been any privatizations in Dubai, which helped boost volumes in 2022.
Expansion
Adnoc L&S plans to pay an annualized 2023 cash dividend of $260 million and expects to increase this by at least 5% annually.
The firm, which has been expanding its fleet to cope with increased demand from the state-owned firm’s businesses, is targeting capital expenditure $4 billion to $5 billion in the medium term.
As part of Adnoc’s efforts to bolster its offshore oil, natural gas and wind businesses, the firm acquired privately-owned ZMI Holdings in July and folded it under its logistics unit.
Including ZMI, Adnoc L&S’s proforma 2022 revenue was $2.29 billion, with adjusted earnings of just under $600 million.
Abdulkareem Al Masabi, Chief Executive Officer of Adnoc L&S, said revenue had grown at a compounded annual rate of 20% from 2017 to 2022 and would continue to increase at a rate of at least 10% in the mid-term.
“Mergers and acquisitions, joint ventures and partnerships with our leading partners are definitely going to be on the table for us to support our expansion in the future,” Al Masabi said.
“As long as it meets our strategic objectives (and) creates value for our shareholders, nothing’s off the table,” he said, referring to sectors for acquisitions.
Adnoc Group companies accounted for nearly three-quarters of total sales for the year ended December 31, 2022, the firm said.
It recently signed a five-year contract with Adnoc Offshore to provide integrated logistics services including port services and warehouse operations.
Citigroup Inc, First Abu Dhabi Bank PJSC, HSBC Holdings Plc and JPMorgan Chase & Co.
have been appointed as joint global coordinators and joint bookrunners. Abu Dhabi Commercial Bank PJSC, Arqaam Capital Limited, Credit Agricole SA, EFG-Hermes, International Securities and Societe Generale SA are joint bookrunners for the offering.
Moelis & Co.
is the independent financial adviser.
–With assistance from Filipe Pacheco, Kateryna Kadabashy, Manus Cranny and Sarah Halls.
(Updates with CEO interview)
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