Abu Dhabi National Oil Co. (Adnoc) is set to sell a 15% stake in its logistics and shipping unit, Adnoc Logistics & Services, in an initial public offering (IPO). The move follows the company’s $2.5bn IPO of its gas business, the world’s second-largest such sale of 2023. The Adnoc Logistics IPO is expected to raise $1.1bn, with shares being offered from 16 May and expected to start trading from 1 June. The move comes as other Gulf markets have remained subdued, resulting in a $3.5bn fall in Middle Eastern IPOs in 2023, compared to the same period last year.
Adnoc Logistics & Services’ proforma 2022 revenue, including its recent acquisition of ZMI Holdings, was $2.29bn, with adjusted earnings of nearly $600m. The company is expanding its fleet and targeting capital expenditure of between $4bn and $5bn in the medium term. Adnoc Logistics accounts for 25% of Adnoc’s total sales and recently signed a five-year contract to provide logistics services for Adnoc Offshore. The company is offering an annualised 2023 cash dividend of $260m and plans to increase this figure by 5% annually.
Joint global coordinators and bookrunners for the IPO include Citigroup, First Abu Dhabi Bank, HSBC and JPMorgan Chase. Joint bookrunners are Abu Dhabi Commercial Bank, Arqaam Capital, Credit Agricole, EFG-Hermes, International Securities and Societe Generale. Adnoc executive director Musabbeh al Kaabi said the IPO would be “for local and international investors” and that the company was “very confident about this market here and the region”.
Overall, Adnoc is seeking to bolster its offshore oil, natural gas and wind businesses, and has sold stakes in other portfolio businesses in recent years, including its drilling unit, Borouge and Fertiglobe.
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