ADNOC to raise $750MM from drilling unit IPO

(Bloomberg) --Abu Dhabi National Oil Co. is seeking to raise about $750 million from its drilling unit’s IPO, in what would rank among one of the largest share sales in the United Arab Emirates.

ADNOC Drilling set the price for its listing at 2.30 dirhams per share, implying an equity value of $10 billion, according to a statement. The offering will represent 1.2 billion shares, or 7.5% of the company, though ADNOC has said it may increase the amount of stock on offer.

The company has enough investor demand to cover the shares currently on offer, according to terms seen by Bloomberg News.

The offering comes as Abu Dhabi tries to revive IPOs on its stock exchange. The bourse, known as ADX, is offering sweeteners that include flexibility on the minimum stake size required for share sales and promising to reduce or forgo listing fees.

Satellite operator Yahsat listed in July, and sovereign wealth fund Mubadala Investment Co. is poised to select underwriters for a potential offering of Emirates Global Aluminium that could value it at more than $15 billion, people with knowledge of the matter said earlier this month.

Abu Dhabi National Oil Co., also known as ADNOC, has also started preparations for a potential IPO of its fertilizer joint venture Fertiglobe, while sovereign wealth fund ADQ is planning to list Abu Dhabi Ports before the end of this year.

The UAE, the third-biggest producer in the Organization of Petroleum Exporting Countries, has used its oil wealth to broaden its economy, diversifying into industries like tourism and developing global transport and trade hubs. Those businesses suffered last year as the coronavirus pandemic slashed energy use, cut air travel and blocked trade flows.

ADNOC Drilling offer details:

• Subscription period opens Sept. 13 and will close on Sept. 23 for UAE retail investors and on Sept. 26 for qualified domestic and international institutional investors
• Final offer price: Sept. 27
• Expected date of listing: on or around Oct. 3
• Ioint global coordinators: First Abu Dhabi Bank, Goldman Sachs, HSBC, JPMorgan
• Joint bookrunners: EFG-Hermes, Emirates NBD Capital, International Securities, Merrill Lynch International and Societe Generale