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UAE: Adnoc Logistics and Services IPO size hiked after demand

The company says the offering has been increased from 15 per cent to 19 per cent

Published: Mon 22 May 2023, 10:49 PM

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Adnoc headquarters in Abu Dhabi. — Reuters file

Adnoc headquarters in Abu Dhabi. — Reuters file

Adnoc Group on Monday announced that the total number of shares offered for the initial public offering (IPO) of its subsidiary Adnoc Logistics and Services has been increased following strong demand from investors.

A statement issued by the company said the offering has been increased from 15 per cent to 19 per cent while the total number of ordinary shares to be sold will amount to 1.4 billion as compared to 1.1 billion previously.

The Abu Dhabi-headquartered firm said the “decision to increase the size of the offering is based on significant investor demand across all tranches. Assuming all of the shares in the offering are sold, the size of the offering will be approximately $762 million to $769 million (Dh2.80 billion to Dh2.83 billion).”

The size of the first tranche, which is open to eligible individual subscribers and other investors who do not qualify as professional investors, has been increased from nine per cent to 12 per cent – representing 168,685,772 ordinary shares. While three per cent of the offering, which represents 42,171,443 ordinary shares, have been reserved for the third tranche, which is allocated for Adnoc Group employees including retirees who are UAE nationals.

The remaining 85 per cent, representing 1,194,857,550 ordinary shares, were reserved for professional investors.

Khaled Al Zaabi, Group CFO of Adnoc, said that the increased offering size for the Adnoc Logistics & Services IPO is set to be the second-largest market so far this year in the Middle East region.

“We have witnessed exceptional demand across all tranches, with significant interest across the local, regional and global investment community in this unique opportunity,” he said.

The UAE’s IPOs have seen strong demand from investors, encouraging companies to increase the size of their offerings. Earlier, Al Ansari Exchange, road toll operator Salik, Empower, Adnoc Gas and others have upped the size of the offering to meet growing demand from investors.

The local and regional IPO activity has been very strong, especially in the UAE and Saudi Arabia.

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According to EY’s first-quarter global IPO market, Abu Dhabi accounted for 14 per cent of the global initial public offerings. It said Abu Dhabi Securities Exchange (ADX) was the third highest in terms of IPO proceeds with $3 billion (Dh11 billion) raised during the January-March 2023 period.

The company earlier set a price range between Dh1.99 to Dh2.01 per share, implying an equity value of $4.01 billion to $4.05 billion (Dh14.7 billion to Dh14.9 billion).

The subscription period for the UAE retail and professional investors remains unchanged and will close on May 23 and May 24, respectively.

The final offer price will be determined through a book-building process and is expected to be announced on May 25. The listing on the Abu Dhabi Securities Exchange is expected on June 1.

-waheedabbas@khaleejtimes.com



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