FERTIGLOBE IPO STANDS TO RAISE AS MUCH AS $827m
▶ Shares have been priced to imply an equity valuation of $5.5bn to $6bn
Fertiglobe, the joint venture between Abu Dhabi National Oil Company and Dutch fertiliser company OCI, may raise as much as $827 million in an initial public offering after the company priced its shares this week.
The company is selling more than 1.14 billion shares representing 13.8 per cent of the company’s share capital. They have a price range between Dh2.45 and Dh2.65, implying an equity valuation of $5.5 billion to $6bn. Based on the minimum price range the company would raise at least $765m from the listing.
Fertiglobe is the world’s largest seaborne exporter of urea and ammonia and the region’s largest producer of nitrogen fertilisers by capacity.
The subscription period will close on Monday for retail investors in the UAE. The second tranche, which is open to qualified institutional investors, will close on Tuesday.
“This IPO represents a milestone moment for Adnoc and Fertiglobe, as well as for the growing depth and development of the UAE’s equity capital markets,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Adnoc managing director and group chief executive and Fertiglobe chairman.
“Fertiglobe is ideally positioned to play a leading role in a critical global industry while accessing new opportunities in the rapidly emerging hydrogen economy,” he said.
The company has also attracted three cornerstone investors with commitments of $231m. They include the Abu Dhabi Pension Fund, Singapore’s sovereign wealth fund GIC and San Francisco activist investor Inclusive Capital Partners.
Fertiglobe also plans to increase its dividend to $200m from $150m, with the payout for the second half of the current financial year due in April 2022.
The company expects to distribute a dividend of at least $400m, which is an increase from $315m for the financial year ending December 2022. Fertiglobe will pay half of the dividend amount in October 2022, with the remainder to be paid in April 2023.
It also appointed Jeffrey Ubben, who is the founder and managing partner of Inclusive Capital Partners, to its board as an independent director.
Adnoc holds a 42 per cent stake in Fertiglobe, with OCI retaining the majority 58 per cent interest.
OCI is listed on the Euronext Amsterdam exchange and has Egyptian billionaire Nassef Sawiris as its biggest shareholder.
Fertiglobe was formed in 2019 after the merger of Adnoc’s fertiliser arm and OCI’s Middle East nitrogen fertiliser business. Fertiglobe’s headquarters is at the Abu Dhabi Global Market.
OCI is expected to indirectly continue to own a majority of Fertiglobe’s share capital after the IPO, while Adnoc is expected to indirectly own at least 36.2 per cent of Fertiglobe’s share capital.
“Our complementary partnership with Adnoc has grown from strength to strength, and Fertiglobe’s listing on the ADX, a pre-eminent financial hub in the region, will bolster visibility in the global markets,” Mr Sawiris said.
Fertiglobe’s ADX listing will be the first of a free zone company onshore in the UAE. It
Fertiglobe is ideally positioned to play a leading role in a global industry while accessing new opportunities
DR SULTAN AL JABER Fertiglobe chairman
strategically positions the company to capitalise on new demand for low-carbon ammonia.
The chemical is an integral part of the clean hydrogen economy, in which blue and green ammonia serve as efficient energy carriers and as a clean fuel. The listing will also allow the company to leverage strengths and global reach from both shareholders.
Citigroup, First Abu Dhabi Bank, HSBC and Morgan Stanley have been appointed as joint global co-ordinators on the IPO. EFG-Hermes, Goldman Sachs and International Securities have been appointed as joint bookrunners. First Abu Dhabi Bank is the lead receiving bank and Al Maryah Community Bank has been appointed as a receiving bank.
The launch of Fertiglobe’s offering follows Adnoc Drilling’s IPO in September, in which the company raised more than $1.1bn from an 11 per cent sale, with the offering more than 31 times oversubscribed.