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UAE: Adnoc Gas prices IPO at Dh2.37 per share

Pricing values company at about $50 billion; share sale oversubscribed 50 times

State oil giant Abu Dhabi National Oil Co (Adnoc) on Friday set the final price for the initial public offering of its gas unit, valuing the company at about $50 billion (Dh182 billion) after drawing record demand.

Adnoc Gas' share price was set at Dh2.37 per share, near the top end of the price range that was set at Dh2.25 to Dh2.43 a share, Adnoc said in a statement.

Proceeds from the IPO came to roughly $2.5 billion out of an order book that topped $124 billion, Adnoc said. That exceeded demand for Saudi oil giant Aramco's 2019 IPO, which raised $25.6 billion and remains the world's largest.

Post-admission, the IPO will be the largest-ever listing on the Abu Dhabi Exchange (ADX), surpassing that of another Adnoc group company, Borouge plc, which successfully listed on the ADX on June 3, 2022

The Middle East bucked global trends last year to raise some $21.9 billion through IPOs, according to Dealogic. That was more than half the total for the wider Europe, Middle East and Africa region.

Adnoc last week said it would increase the stake offered to investors to 5 per cent from 4 per cent due to strong demand for the deal, Abu Dhabi's largest IPO.

Adnoc Gas is expected to begin trading on March 13, subject to customary closing conditions, under the ticker symbol "AdnocGAS" and ISIN "AEE01195A234".

Adnoc Group acting chief financial officer Khaled Al Zaabi said the strong interest in the IPO highlighted the "attractiveness of Adnoc's world-class and low-carbon intensity energy asset base" and Abu Dhabi as a destination for global capital.

"Adnoc is delighted with the unprecedented demand for Adnoc Gas shares from the UAE retail investors as well as the local and global institutional investor community – and we are extremely proud that this IPO witnessed record demand for a UAE and MENA region IPO, with Adnoc Gas being the largest-ever market debut in Abu Dhabi and the largest IPO globally to date this year.

"This truly historic listing is the fifth company Adnoc has successfully brought to market in as many years, with the unparalleled level of investor interest reinforcing both the attractiveness of Adnoc's world-class and low-carbon intensity energy asset base, and cementing Abu Dhabi's leading position as a go-to destination of global capital.

"As the next landmark milestone in our ongoing value creation program, Adnoc Gas is a highly attractive value proposition, and underpins Adnoc's key role as a catalyst and critical enabler of domestic economic growth and the diversification of the UAE financial marketplace. We welcome our broadest investor base yet to join Adnoc as we continue to deliver sustainable growth for Abu Dhabi, the UAE, and our shareholders."

The group has raised billions of dollars from listing businesses like Adnoc Drilling and Fertiglobe, as well as from selling stakes in its network of gas and oil pipelines. It also plans to float its logistics and services unit.

The bookbuilding process generated orders of over $124 billion (equivalent to over Dh450 billion) in aggregate from qualified institutional investors in a number of countries, including the UAE and UAE retail investors, including employees of Adnoc group companies residing in the UAE and UAE national retirees of Adnoc group companies residing in the UAE, implying an over-subscription level above 50 times in aggregate.

The company confirms that the previously announced increased offering size of 3,837,571,100 ordinary shares, equivalent to approximately 5 per cent of the Company's total issued share capital, has been fully allocated, resulting in gross proceeds of approximately $2.5 billion, the net proceeds of which will be received by Adnoc, upon settlement.

Admission is expected to take place at 10:00 am (Gulf Standard Time) on March 13,

Upon admission, Adnoc will continue to own a majority 90 per cent stake in the company. Abu Dhabi Pension Fund, Alpha Wave Ventures II, LP, IHC Capital Holding LLC, OneIM Fund I LP, and entities ultimately controlled by ADQ and the Emirates Investment Authority will, in each case, directly or indirectly, subscribe for 34 per cent of the offering (via the Qualified Investor Offering) through their IPO cornerstone investment agreements.

The cornerstone investors, subject to certain conditions, will not offer, sell or announce an offer of any shares they have acquired under the for a period of 12 months following admission.

Following the completion of the subscription period of the offering, the size of the first tranche of the offering (reserved for first tranche subscribers ) was set at 12 per cent; the size of the second tranche (reserved for investors in the qualified investor offering) was set at 84 per cent.

The size of the third tranche of the offering (reserved for employees of Adnoc group companies residing in the UAE and UAE national retirees of Adnoc Group companies residing in the UAE) was set at 4 per cent. Investors participating in the UAE retail offering will receive an sms confirmation of their respective allocation on March 8.

Total demand across the tranches in the UAE Retail Offering amounted to more than $23 billion (in excess of 58 times oversubscribed), the largest-ever demand for retail tranches in a MENA IPO to date.

Moelis & Company UK LLP DIFC Branch acted as the Independent Financial Advisor to the Company.

First Abu Dhabi Bank PJSC and HSBC Bank Middle East Limited acted as Joint Global Coordinators. Abu Dhabi Commercial Bank PJSC, Arqaam Capital Limited, BNP PARIBAS, Deutsche Bank AG, London Branch, EFG-Hermes UAE Limited (acting in conjunction with EFG Hermes UAE LLC) and International Securities L.L.C. acted as Joint Bookrunners.

First Abu Dhabi Bank PJSC acted as the Lead Receiving Bank.  Abu Dhabi Commercial Bank PJSC, Abu Dhabi Islamic Bank PJSC and Al Maryah Community Bank acted as the Receiving Banks.

The Shariah Supervision Committee of First Abu Dhabi Bank PJSC has issued a pronouncement confirming that, in its view, the Offering is compliant with Shariah principles.