Adnoc boosts size of drilling unit’s IPO to $1.1 billion

ABU DHABI: The Abu Dhabi National Oil Company (Adnoc) hAS said that it was increasing the size of its drilling unit’s initial public offering to cope with the heavy demand for shares, Khaleej Times reported.

The state oil company will now list 11 per cent of Adnoc Drilling on the local bourse, raising as much as Dh4.05 billion ($1.1 billion) in what is likely to be the emirate’s biggest listing in at least four years. Adnoc had initially planned to raise $750 million by offering a 7.5 per cent stake.

“Subject to completion of the IPO, Adnoc will continue to own a majority 84 per cent stake in the company, while Baker Hughes, which entered into a strategic partnership with Adnoc Drilling in October 2018, will retain its 5.0 per cent shareholding in the Company,” an Adnoc statement said. The offer price of Dh2.30 per share remains unchanged.

As part of the new offering size, Adnoc also intends to increase the size of the tranches reserved for UAE retail investors, including eligible Adnoc Group companies’ employees and UAE national retirees. The final tranche sizes will be determined at Adnoc’s discretion and announced on September 27, 2021.

The new offering size was determined by Adnoc, as the selling shareholder, based on significant investor demand and the considerable oversubscription across all tranches. “The enlarged offering will enable a broader investor base to obtain exposure to Adnoc Drilling’s highly attractive value proposition,” it said.

The subscription period for the Adnoc Drilling IPO remains unchanged and will close on September 23, 2021 for UAE retail investors and on September 26, 2021 for qualified domestic and international institutional investors. It is expected to list on the ADX on or around October 3, 2021.

Adnoc Drilling’s IPO comes amid an upswing in listings in Abu Dhabi and Saudi Arabia. While Riyadh has been the region’s hottest market for listings over the past two years, Abu Dhabi has been trying to revive its local bourse. Satellite operator Yahsat kicked off the IPO rush in July, becoming the first listing on the exchange in nearly four years.

Since then, a spate of offerings has been announced. Abu Dhabi’s sovereign wealth fund Mubadala is preparing an IPO of Emirates Global Aluminium and Adnoc is planning to list its fertilizer joint venture as soon as October. Wealth fund ADQ is also preparing to offer shares in Abu Dhabi Ports before the end of the year.

In Saudi Arabia, a $1.2 billion IPO by ACWA Power is drawing high interest from investors. The listing, set to be the country’s biggest since Aramco, had initial demand amounting to several billion dollars and advisers are having to limit allocations to institutional investors.

The Saudi Telecom Co said its internet services raised $966 million from an IPO, which was multiple times oversubscribed.