Adnoc Distribution shares make strong debut on ADX
dubai — Shares of Abu Dhabi National Oil Company’s fuel distribution unit made a strong stock market entrance on Wednesday, opening 16 per cent above its initial public offer price.
Adnoc Distribution’s IPO, Abu Dhabi’s first in six years, raised $845 million, and was oversubscribed several times.
Following a bell ringing ceremony led by Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO, and Hamad Al Shamsi, chairman of the Abu Dhabi Securities Exchange (ADX), Adnoc Distribution is started trading on the ADX under the symbol ‘Adnocdist’.
The shares, which were listed at an initial public offering price of Dh2.5, were trading at Dh2.77 cents at 10:51am.
Adnoc said the IPO brought the subsidiary’s market capitalisation to $8.5 billion, making it the fourth-largest firm on the ADX.
The IPO was a tremendous success and drew a very strong response from investors, according to Rashed Al Baloushi, CEO of the Abu Dhabi Securities Exchange.
Al Baloushi said a total of 12,000 investors from 73 nationalities participated in the subscription, with final allocations hitting approximately 90 per cent for qualified investors and 10 per cent for individual and other investors.
“The offering was multiple times oversubscribed on the qualified investor tranche. The retail or individual investor tranche of the offering was oversubscribed by 22 times on the original retail tranche size; and owing to this exceptional level of oversubscription, it was decided to increase the retail tranche size to10 per cent of the offering, allowing retail investors to further participate in this unique opportunity,” Al Baloushi said.
He added that the significant interest and demand from UAEbased investors paves the way for further interest and investment in similar future transactions.
In a statement, Adnoc said 90 per cent of the shares were sold to institutional investors, a third of them international, and the rest to
The retail or individual investor tranche of the offering was oversubscribed by 22 times on the original retail tranche size
Rashed Al Baloushi,
CEO of the Abu Dhabi Securities Exchange
individual investors. With 360 fuel stations and more than 235 stores, Adnoc Distribution is the UAE’s largest operator of petrol stations and the sole retail fuel operator in Abu Dhabi and Sharjah.
“We were extremely pleased with the demand for this landmark IPO. We received substantial interest from the international investment community, as well as an overwhelming response from investors in the UAE,” Al Jaber said.
“As we accelerate the transformation of Adnoc to drive value, growth and returns across our business, year-on-year growth in credit to private sector year-to-date credit disbursed to individuals we are also undertaking a number of important, strategic transactions that are unprecedented in Adnoc’s history.”
He said transactions such as this IPO would allow Adnoc to better manage its capital and portfolio of assets, and expand its range of new and existing partnerships — from the upstream to the downstream.
“The IPO also supports the reinvigoration of the ADX, and will be a catalyst for further growth and development of UAE capital markets,” he added.
Established in 1973, Adnoc Distribution posted net profits of $485 million in 2016. The IPO is part of Adnoc’s program to expand strategic partnerships and diversifying sources of income and diversifying mutual investment opportunities,” Al Jaber said.
The IPO was the largest in Abu Dhabi for a decade, and is expected to pave the way for as many as several listings next year. Adnoc Distribution is also the first Gulf energy asset to be privatised in an era of low oil prices that began three years ago. Saudi Arabia plans to list five per cent of its national oil company Saudi Aramco by the end of 2018.
Adnoc Distribution’s deputy chief executive John Carey told reporters that the company plans to expand its fuel stations into Dubai and Saudi Arabia in 2018.
— issacjohn@khaleejtimes.com
analyst at Moody’s Investors Service
year-to-date credit provided to the private sector
head of Mena Research at Emirates NBD
National banks operating in the UAE Total banks branches functional in the UAE year-on-year increase in total assets of banks year-on-year rise in bank deposits in Q3
KT GRAPHIC • SOURCE: CENTRAL BANK OF THE UAE