ADNOC raises $1.64bn through combined shares & bond offering

By Amirtha P S, Desk Reporter
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The UAE state-owned oil company, Abu Dhabi National Oil Company (ADNOC) has completed its plans to raise $1.64 billion through the issue of new shares and exchangeable bonds in its fuel retail arm, ADNOC Distribution.

The national oil company said that following a successful book-building process, the combined offering of 375 million shares and approximately $1.195 billion of exchangeable bonds were placed at a blended price of $1.31 per share, which is 5.7 percent above its current three-month volume-weighted average and 1 percent below yesterday’s closing price of $1.31 per share.

The combined offering “was covered in less than one hour” and attracted significant demand from regional and international investors, ADNOC said.

Dr. Sultan Al Jaber
Dr. Sultan Al Jaber
UAE Minister of Industry & Advanced Technology

“The success of this innovative and pioneering Combined Offering, the first of its kind in the GCC, once again highlights the attractive investment opportunities and environment provided by ADNOC and, more broadly, Abu Dhabi and the UAE. We were delighted to see exceptionally strong demand and a number of new world-class institutional investors participate in both the share offering and exchangeable bond offering, reinforcing the attractiveness of Adnoc Distribution and bringing new FDI into the UAE.”

ADNOC Distribution is the UAE’s biggest fuel retailer, with a total of 449 stations at the end of March and ambitious plans to extend its network both in the UAE and Saudi Arabia.

ADNOC floated 10 percent of the distribution business in 2017 and listed a further 10 percent through an institutional placing last year. The 375 million shares offered to equate to a stake of about 3 percent in the company. The bond, which has a maturity date of 2024, is exchangeable at a price of $1.36 per share, under certain conditions. It is exchangeable for a further 7 percent of the company’s shares.

The deal has the potential to increase its free float to 30 percent, assuming the bonds are exchanged. This will bring “greater liquidity to ADNOC Distribution shares” and broaden its investor base, the state-owned oil company said.

ADNOC Distribution’s shares are set to be included in Morgan Stanley Capital International’s (MSCI) Emerging Markets index. It will join nine other UAE-listed companies that are part of the index, which is tracked by funds with billions of dollars worth of assets. The company reported a 58 percent rise in the first-quarter profit this year of $171.8 million.

Related: ADNOC strikes natural gas delivery deals with two UAE industrial firms