KHALEEJ TIMES, Saturday, Feb 18, 2023 | Rajab 27, 1444
Adnoc to float 4% of its gas business in IPO
Emirates:
Adnoc Gas, the Abu Dhabi National Oil Company’s gas processing firm, on
Friday announced its intention to float 4 per cent of its issued share capital
on the Abu Dhabi Sotck Exchange.
The energy firm’s IPO plans are the latest in a strong of share sales that have
boosted the UAE bourses over the past year.
According to a statement, the company intends to offer 3,070,056,880 of
its shares to the public. The
subscription period is expected to run from February 23 to March 1. The
Qualified Investor Offering subscription period, to open on the same day, is
expected to run till March 2. Listing is expected on March 13.
Acciording to agency reports, Adnoc has access to 95 per cent of the UAE’s
natural gas reserves, the world’s seventh largest. It supplies gas to more than
60 per cent of the local market and exports to more than 20 countries. The
company had a net income of $4.2 billion in the first 10 months of 2022, up from
$3.6 billion in all of 2021.
Adnoc Gas has a total gas processing capacity of over 10 billion standard cubic
feet per day and a liquid processing capacity of 29 million tonnes per year.
Adnoc announced the discovery of up to 2 trillion standard cubic feet of gas in
an offshore area last year.
Subject to completion of the offering, Adnoc Gas expects to target payment of
dividends of $1.625 billion in the fourth quarter of 2023 in respect of the
first half of the year ended December 31, 2023; and a further $1.625 billion in
the second quarter of 2024 in respect of the second half of the year.
Thereafter, Adnoc Gas expects to grow the annual target dividend amount by a
growth rate of 5 per cent per annum on a dividend per share basis over the
period 2024-2027. “Natural gas is central to the energy transition,” Khaled Al
Zaabi, acting group CFO of Adnoc, said in a statement. “Adnoc Gas is
well-positioned to responsibly harness our significant natural gas resources,
while driving efficiencies, delivering value, and reliably supplying this key
fuel to meet the world’s growing energy needs.”
With access to the world’s seventh-largest gas reserves, Adnoc Gas expects to
benefit from projected robust, long-term demand globally through its tangible
growth opportunities, in view of the projected rise in gas demand in the next
25-30 years.
Adnoc Gas’ differentiated platform benefits from a combination of low-cost base
with rich, largely contracted molecules that mix attractive margins with
dependable demand. Through a long-term gas supply and payment agreement with
Adnoc, the Adnoc Gas group benefits from one of the lowest-cost upstream
resource bases in the world, and is provided a stable flow of feedstock that is
rich in NGLs and condensates. Due to Adnoc’s low-cost production relative to the
gas production market globally, the Adnoc Gas group’s feedstock is more
resilient to commodity price cycles than other upstream operations with higher
production and development costs, which contributes to its attractive margins.
All of the Adnoc Gas shares are being offered by Adnoc which, prior to the
offering, holds approximately 95 per cent of the share capital of the company.
The net proceeds generated by the offering will be received by Adnoc, and all
expenses of the offering will be borne by the parent firm. The offering is being
conducted, among other reasons, to allow Adnoc to sell part of its shareholding
to more actively manage and optimise its portfolio of assets, while providing
increased trading liquidity in the shares of the company and raising the
company’s profile within the international investment community.
Prior to the offering, Adnoc transferred to Abu Dhabi National Energy Company
PJSC (Taqa) approximately 5 per cent of the share capital of the company. Taqa
is the holding company for a leading integrated energy and utilities group
headquartered in Abu Dhabi and has a long-standing strategic partnership with
Adnoc. Adnoc is expected to own approximately 91 per cent of Adnoc Gas’ share
capital post-IPO.
Moelis & Company UK LLP DIFC Branch has been appointed as the independent
financial advisor to the company.
First Abu Dhabi Bank PJSC and HSBC Bank Middle East Limited have been appointed
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. have been appointed as joint bookrunners. FAB has been appointed as the
lead receiving bank. ADCB, ADIB and Al Maryah Community Bank have been appointed
as the receiving banks.