Adnoc to sell 7.5% drilling unit stake in mega IPO
IPO COMES AS ADX SOARS WELL PAST DH1TR IN MARKET CAPITALISATION
Abu Dhabi is preparing for a round of mega-IPOs — the Adnoc Drilling Company will list its shares on the ADX by offering 7.5 per cent of its issued share capital. Apart from investors in the UAE and outside, Adnoc Group companies’ employees and Adnoc Group’s UAE National retirees can participate. The shares could start trading next month.
The Abu Dhabi entity is the largest national drilling company in the Middle East by rig fleet size. The parent company, Adnoc retains the right to increase the size of the offering at any time before pricing of the Offering.
Adnoc Drilling operates 107 rigs, of which 96 rigs are owned and 11 rigs are rented. It is the sole provider of drilling rig hire services and certain associated rig-related services to the Adnoc Group. In 2020, Adnoc Drilling had revenues of $2.09 billion and profit of $569 million. For the six months ended June 30, 2021, revenues were $1.12 billion.
The IPO 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 and create new investment opportunities across its business. Plus, this will allow it to increase trading liquidity for the shares and raise its profile with the international investors.
Adnoc will continue to own a majority of Adnoc Drilling’s share capital post-IPO. Baker Hughes Holding SPV Ltd. which holds 5 per cent, will not be offering any shares for sale in the IPO.
This highly compelling offering — in a company with a robust growth trajectory and attractive dividend policy — is open to all citizens and residents of the UAE in addition to international and local institutional investors.
Significant milestone
“I am delighted to announce our intention to float a minority stake in Adnoc Drilling,” said Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc’s Managing Director and Group CEO. “This highly compelling offering — in a company with a robust growth trajectory and attractive dividend policy — is open to all citizens and residents of the UAE in addition to international and local institutional investors.
“Building on the highly successful listing of Adnoc Distribution in 2017, this offering marks another significant milestone in Adnoc’s ongoing
Dr. Sultan Ahmed Al Jaber | UAE Minister of Industry and Advanced Technology and Adnoc’s Managing Director and Group CEO
journey in unlocking and maximising value across our integrated asset base.”
Adnoc is in an ongoing transformation programme to “unlock and create value” by expanding its engagement with new strategic partners and global investors. It has developed a strategy for the more active management of its asset portfolio to drive growth and returns across its entire value chain.
“This IPO will constitute a further step in Adnoc’s continued growth trajectory,” the energy giant said in a statement. “Adnoc is fully supportive of Adnoc Drilling’s management and business strategy and intends to remain Adnoc Drilling’s long-term majority shareholder.”