ADNOC plans to raise $1.6 billion via stock and bond sales
DUBAI (Bloomberg) - Abu Dhabi’s state oil firm plans to raise $1.64 billion by selling more shares in its fuel retail unit and by issuing bonds, as the emirate taps its energy wealth to attract investment.
Abu Dhabi National Oil Co. will offer 375 million shares in ADNOC Distribution PJSC at 4.36 dirhams a share. That represents a discount of about 10% to the market price of 4.85 dirhams. ADNOC will also raise $1.195 billion of senior bonds that mature in 2024 and are “exchangeable under certain conditions” into ADNOC Distribution’s stock.
Abu Dhabi, capital of the United Arab Emirates, contains almost all the OPEC member’s hydrocarbon reserves. The emirate, along with others in the region such as Saudi Arabia and Oman, is seeking to use money from sales of energy assets to build new industries and diversify the economy.
ADNOC sold 10% of the retail subsidiary in 2017 via an initial public offering on the local bourse. It sold another 10% in September. The retail unit, valued at 60.6 billion dirhams ($16.5 billion), is expanding internationally with outlets in Saudi Arabia and is looking to other markets like Egypt and India. ADNOC Distribution will be included from Thursday in MSCI Inc.’s index of major emerging-market stocks.
The latest share sale and the eventual bond conversion would add up to about 10% of additional stock being put on the market, ADNOC said. The shares and bonds will be sold to institutional investors and won’t be available to the public.
Citigroup Inc. and First Abu Dhabi Bank PJSC are managing the ADNOC Distribution share offering. Citigroup, FAB and Abu Dhabi Commercial Bank PJSC are working on the bond sale.
Since 2016 ADNOC has been restructuring its business by bringing investors into its operating units and infrastructure. The company is considering IPOs of its drilling business and a fertilizer joint venture called Fertiglobe. ADNOC has already raised more than $20 billion from deals including sales of stakes in its oil and natural gas pipelines, real estate and its refining business.
