The company expects the final offer price to be announced on May 26, after the book-building process
ADNOC L&S, ADNOC Group’s logistics unit, has started taking investor orders for its initial public offering (IPO) as the maritime logistics firm is set to raise as much as $607m (Dhs2.23bn).
ADNOC is offering 1.11 billion shares, equivalent to 15 per cent of the total issued share capital of its logistics business, and the indicative share price of Dhs1.99 to Dhs2.01 apiece implies a market valuation of around Dhs14.9bn.
The maritime logistics firm is offering the shares in two tranches — institutional investors and retail investors— between May 16 and May 24, with an expected trading debut on the Abu Dhabi Securities Exchange on June 1, 2023.
The company expects the final offer price to be announced on May 26, after the book-building process.
Subscriptions are now open until May 23 for the UAE Public Offering of ADNOC Logistics & Services, an opportunity for citizens and residents to benefit from ADNOC’s long-term strategic value creation program.@adx_ae #EnergyForLife
— ADNOC Group (@ADNOCGroup) May 16, 2023
ADNOC L&S’s IPO drew in four cornerstone investors including Al Seer Marine Supplies & Equipment Company, National Marine Dredging Company, Alpha Oryx and Abu Dhabi Pension Fund – which agreed to subscribe for shares worth a combined $180m.
The Abu Dhabi-based firm plans to pay an annualised 2023 cash dividend of $260m and expects to increase this by at least 5 per cent annually. The company, which has been expanding its fleet to cope with increased demand from the state-owned firm’s businesses, is targeting capital expenditure of up to $5bn in the medium term.
Citigroup, First Abu Dhabi Bank, HSBC Holdings and JPMorgan Chase & Co. have been appointed as joint global coordinators and joint book runners. Abu Dhabi Commercial Bank, Arqaam Capital, Credit Agricole, EFG-Hermes, International Securities and Societe Generale SA are joint book runners for the IPO.
ADNOC Group’s record IPOs
Meanwhile, the maritime logistics firm’s IPO is the second share offering by ADNOC after the state-owned energy company raised $2.5bn from the offering of its gas business, ADNOC Gas, in March.
Over the years, ADNOC has been selling stakes in its units as part of a broader strategy to help fund the diversification of the economy. It listed chemicals firm Borouge last year and has previously sold shares in ADNOC Drilling and fertilizer company Fertiglobe.
The first three months of 2023 proved MENA IPOs continue to go against global trends. Even though the number of IPOs in Q1 2023 was lower than in Q1 2022 (10 IPOs), the mega IPO of ADNOC Gas stood out for the region with the highest proceeds globally for the quarter.
“2023 continues to have a healthy IPO pipeline across the region with several initiatives to support private and government entities on their path to IPO,” said Brad Watson, EY MENA Strategy and Transactions Leader.
Kuwait-based asset management firm, KAMCO Invest, said the IPO pipeline for 2023 remains strong and “based on our estimates at the start of the year the pipeline could range between 27-39 companies between announced and rumoured GCC IPO issuances”.
Shares in Presight AI Holding soared 176 per cent on its trading debut in March after the Abu Dhabi data analytics firm raised Dhs1.7bn in its IPO. Dubai-based remittance and money exchange firm Al Ansari Financial Services also raised Dhs773m via IPO after pricing its shares at the top of the range.
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