Adnoc unit IPO to raise RM3.7b after narrowing range

DUBAI • Abu Dhabi National Oil Co (Adnoc) plans to raise as much as 3.31 billion dirhams (RM3.7 billion) 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% stake.

The crude producer reduced the price range to 2.35 dirhams to 2.65 dirhams for the shares of Adnoc for Distribution PJSC, according to terms seen by Bloomberg News. The initial price range was 2.35 dirhams to 2.95 dirhams. The company initially planned to sell as much as 20%.

The offering is covered throughout the revised price range, according to the document.

Adnoc, which pumps most of the crude in the United Arab Emirates (UAE), plans to announce the final pricing on Dec 8, with the stock expected to begin trading on Dec 13 in Abu Dhabi. The shares would be priced to give investors “a successful after-market performance”, John Carey, Adnoc Distribution’s deputy CEO told Bloomberg last week.

IPO activity in the UAE is picking up after only two deals were completed in 2015 and 2016. Emaar Properties PJSC raised US$1.3 billion (RM5.33 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. Emaar Development PJSC struggled to complete its offering as a crackdown on corruption in Saudi Arabia hurt market sentiment and led investors to pull orders, people familiar with that deal said.

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, CEO of NBAD Securities LLC said yesterday by phone. “There has been strong demand for shares from local investors and I think at this price range, longterm investors will be rewarded,” he said.

The listing of Adnoc Distribution will be 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 US$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, about the same as a year ago, according to the listing announcement. It secured a US$2.25 billion loan from a group of banks this month, according to the statement.

The Adnoc Distribution IPO is being coordinated by Citi- group 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 advisor to Adnoc and Adnoc Distribution. — Bloomberg