Abu Dhabi National Oil Company's (Adnoc) is set to raise over Dh3.1 billion ($843 million) from the its initial public offering (IPO) of its fuel distribution unit after lowering the top end of the offer price and deciding to only sell a 10 per cent stake.

 

This transaction represents an important further step in Adnoc’s ongoing transformation and value creation strategy announced earlier this year.

 

The price was set at Dh2.5 and the deal size comprises 10 per cent of all shares of Adnoc Distribution, said a statement from First Abu Dhabi Bank (FAB), the only regional bank acting as a joint global co-ordinator on this transaction and the sole lead receiving bank.

 

The crude producer reduced the price range to Dh2.35 to Dh2.65 for the shares of Abu Dhabi National Oil Company for Distribution (Adnoc Distribution).

 

The initial price range was Dh2.35 to Dh2.95. The company initially planned to sell as much as 20 per cent.

 

The retail tranche of the offering, which closed on December 7, secured significant local interest and was oversubscribed by 22 times at the initial tranche size, raising Dh3.49 billion in retail subscriptions alone.

This enabled the issuer to double the size of the retail tranche from 5 to 10 per cent of the total offering size. The institutional tranche has garnered substantial engagement from high quality, global institutional investors, and was oversubscribed multiple time, said the statement from FAB.

 

Specifically, the IPO forms part of Adnoc’s more proactive and smarter approach to managing its assets and capital as it looks to unlock and drive greater value from across the entire Adnoc Group business, it added.

André Sayegh, the deputy group CEO and head of corporate and investment banking at FAB, said: "The response from investors for this IPO has been very positive, generating a record demand of Investor Number applications."

"The launch of this unique offering marks a series of firsts for the market. It is the first bookbuild IPO for the Abu Dhabi Securities Exchange (ADX), the first international offering, and it will also be the first and largest retail sector stock on the ADX. This IPO will help further diversify the market and provide investors with a greater choice," stated Sayegh.

"The company will also be amongst the largest stocks on ADX, helping to attract more foreign direct investment into the UAE," he added.

The IPO is a milestone for Adnoc, as it represents the first time the Abu Dhabi firm has listed any of its group companies. The IPO also follows on from the first-ever capital markets bond issuance for an Adnoc company, Abu Dhabi Crude Oil Pipeline (ADCOP), last month, where FAB was also joint global co-ordinator.-TradeArabia News Service