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ADNOC Gas increases size of listing and may raise as much as $2.5bn

ADNOC Gas increases size of listing and may raise as much as $2.5bn

ADNOC Gas increases size of listing and may raise as much as $2.5bn

Adnoc could raise up to Dh9.3 billion ($2.54 billion) from an initial public offering of its gas business after it increased the size of the stake being sold in Adnoc Gas to 5 per cent, citing strong investor demand.

The state energy company raised the size of offering from the previous 4 per cent and will now sell more than 3.8 billion shares, up from about 3 billion earlier, Adnoc said on Monday.

Adnoc Gas last week set the offering share price between Dh2.25 and Dh2.43 per share.

The final offer price will be determined through a book-building process and is expected to be announced on

March 3.

The first tranche of the share offering has been raised to 12 per cent, representing more than 460.5 million common shares, while the third tranche has been increased to more than 153.5 million shares, about 4 per cent of the total offering.

Qualified investors have access to more than 3.2 billion shares, which make up 84 per cent of the offering.

The subscription period for the UAE retail offering and the qualified investor offering remains unchanged and will close on March 1 and March 2, respectively, Adnoc said on Monday.

“We are delighted to announce that we will be increasing the offer size for the IPO of Adnoc Gas, which is set to be the largest-ever market debut on the ADX to date, and also marks the next remarkable milestone for Adnoc and our ongoing value-creation journey,” said Khaled Al Zaabi, Adnoc’s chief financial officer.

“We have witnessed substantial investor demand across all tranches, reflecting Adnoc Gas’ status as a key component of Abu Dhabi and the UAE’s energy ecosystem.”

The listing of the gas processing and marketing unit is the UAE’s biggest IPO this year and the company expects to start trading on the ADX on March 13.

Adnoc Gas has access to 95 per cent of the UAE’s natural gas reserves, estimated to be the seventh largest globally. The company also supplies more than 60 per cent of the UAE’s gas needs.

It will operate eight gas processing sites and a pipeline network of more than 3,250km.

Adnoc Gas plans to pay $3.25 billion in dividends in 2023, split in two payments. It intends to increase the annual dividend amount by 5 per cent from 2024 to 2027.

The deal is the latest in a string of IPOs from the Gulf region, where economies have benefitted from higher oil and gas prices.

Brent crude, the benchmark for two thirds of the world’s oil, surged to a 20-year high of $140 a barrel after Russia’s invasion of Ukraine last year.

The international benchmark has since give up most of its gains and is currently trading at about $83 a barrel.

Middle East IPOs raised more than $23 billion in 2022 from 48 listings, compared with $7.52 billion raised from 20 offerings in the previous year.

That was the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest.

The UAE had 12 listings that raised $11 billion last year, apart from the joint Abu Dhabi-Riyadh listing of Mena food franchisee Americana, which reaped $1.8 billion in late 2022.