The main oil company of the United Arab Emirates has increased the size of the initial public offering of its gas business, already the largest in the world so far this year, to $2.5 billion.
The move comes after investors snapped up all available shares just hours after they went on sale last week. Abu Dhabi National Oil Co. will now offer 3.84 billion shares, or a stake of about 5%, in Adnoc Gas in the IPO, according to a statement released on Monday. I was looking to sell 4% before.
The price range remains unchanged at 2.25 dirhams ($0.61) to 2.43 dirhams per share, valuing the company at up to $50.8 billion. The retail offering was increased to 12% of the total operation, while the employee section was increased to 4%.
There has been “significant investor demand across all tranches”, Adnoc Gas said. The Middle East had seen a surge in investor interest last year following its IPO boom that countered a global slowdown and rising energy prices following the invasion of Ukraine by part of Russia
The units merged to create Adnoc Gas reported record underlying earnings of $8.7 billion in the year to October as gas prices rose when the war began.
The IPO will be the biggest ever in Abu Dhabi, surpassing the $2 billion deal for chemical company Borouge in mid-2022. It is the latest in a series of share sales in the Persian Gulf, already that governments seek to finance a transition away from fossil fuels and attract more international investors to their markets.
Adnoc Gas is taking orders from retail investors until March 1 and from institutional traders until a day later, with a final price announcement on March 3. Negotiations are expected to begin on March 13.
The IPO has been operating on an accelerated schedule, with Adnoc only announcing the listing at the end of November and formally setting up the gas unit earlier this year. The tight schedule made Goldman Sachs Group Inc. and Bank of America Corp. abandon the deal, Bloomberg News reported.
Prior to the IPO, Adnoc transferred 5% of Adnoc Gas to Taqa, a state-controlled power producer in Abu Dhabi.
Adnoc Gas expects to pay dividends of $3.25 billion by 2023. It has a production capacity of 10 billion cubic feet per day at eight onshore and offshore sites and a pipeline network of more than 3,250 kilometers (2,020 miles).
First Abu Dhabi Bank PJSC and HSBC Holdings Plc are the lead banks in the IPO. Abu Dhabi Commercial Bank PJSC, Arqaam Capital Limited, BNP Paribas, Deutsche Bank AG, EFG-Hermes and International Securities are joint bookrunners. Moelis & Co. is the independent financial advisor.
