ADNOC unit IPO set to raise AED3.31bn

Bloomberg

Abu Dhabi National Oil Co. plans to raise as much as AED3.31 billion ($902 million) from the initial public offering (IPO) of its fuel-retailing unit after lowering the top end of the offer price and deciding to only sell a 10 percent stake.
The crude producer reduced the price range to AED2.35 dirhams to AED2.65 for the shares of Abu Dhabi National Oil Co. for Distribution PJSC, according to terms seen by Bloomberg News. The initial price range was AED2.35 to AED2.95 dirhams. The company initially planned to sell as much as 20 percent.
The offering is covered throughout the revised price range, according to the document. ADNOC, which pumps most of the crude in the UAE, plans to announce the final pricing on December 8, with the stock expected to begin trading on December 13 in Abu Dhabi. The shares would be priced to give investors “a successful after-market performance,” John Carey, Adnoc Distribution’s deputy chief executive told Bloomberg last week.
IPO activity in the UAE is picking up. Emaar Properties PJSC raised $1.3 billion from the sale of shares in its development unit last month, while Mubadala Investment Co. expects to IPO its Emirates Global Aluminium unit next year.
The new price range makes the share sale a better deal for investors and increases the chances of the stock rising when it begins trading, Mohammed Ali Yasin, chief executive officer of NBAD Securities LLC said by phone. “There has been strong demand for shares from local investors and I think at this price range long-term investors will be rewarded,” he said.
The listing of ADNOC Distribution will the first IPO on the Abu Dhabi Exchange since National Takaful Co. Watania PJSC sold shares in 2012 and the biggest listing on the stock market for the past 10 years, according to data compiled by Bloomberg.
ADNOC, which raised $3 billion from bond sales in October, will try to sell stakes in some units and seek partners for others, CEO Sultan Al Jaber said in an interview this month. ADNOC Distribution reported a profit of 1.31 billion dirhams for the first nine months of this year, according to the listing announcement. It secured a $2.25 billion loan from a group of banks this month, according to the statement.
The ADNOC Distribution IPO is being coordinated by Citigroup Inc., First Abu Dhabi Bank PJSC, HSBC Bank Plc and Merrill Lynch International. EFG-Hermes UAE Ltd., Goldman Sachs Group Inc. and Morgan Stanley are acting as joint bookrunners for the offering. Rothschild & Co. is the sole financial adviser to ADNOC and ADNOC Distribution.