The IPO strategy of Abu Dhabi’s national oil company ADNOC seems to be timely.
After the billion dollar IPO of its ADNOC Drilling drilling unit, the company now wants to repeat this success with its fertilizer JV Fertiglobe.
Fertiglobe raised $ 795 million in its initial public offering (IPO), making it the third largest offering on the Abu Dhabi Securities Exchange. This week the company announced that the final offer price at the end of the bookbuilding process had been set at 2.55 dirhams ($ 0.69), somewhere in the middle of the 2.45-2.65 dirhams price range last week was specified.
The company, which is a joint venture between the Dutch chemical manufacturer OCI and ADNOC, has sold 1,145,582,011 common shares, which is 13.8% of the total issued share c -ital of Fertiglobe. The latest figures show that Fertiglobe’s market c -italization will be around $ 5.8 billion when it is listed on the stock exchange. Market c -italization is in line with analysts’ expectations, which had previously stated a range between $ 5.4 billion and $ 6 billion. The IPO is currently oversubscribed an average of 22 times and 32 times for the qualified investor tranche excluding Cornerstone investors. Total demand is said to be $ 17.4 billion.
The success of Fertiglobe follows the Drilling IPO of ADNOC, which was also a great success. At the beginning of October, the initial public offering of ADNOC Drilling is said to have generated gross proceeds of more than 1.1 billion US dollars. ADNOC stated that the offering was oversubscribed 31 times. Total registered demand reached a level of 34 billion US dollars. Due to the great demand, ADNOC had already increased the offer volume from 1,200,000,000 ordinary shares to 1,760,000,000 ordinary shares, which corresponds to 11 percent of the total issued share c -ital.
The above successes could lead to more proactive proposals from ADNOC as the Abu Dhabi-based oil and gas giant moves towards a complete restructuring of its overall portfolio. Not only is the NOC taking advantage of the current market sentiment fueled by increased global oil and gas demand, but it is definitely aiming to monetize its strategic position in chemicals and fertilizers.
The story goes on
Prefabricated praise is a prime example. The demand for fertilizers will not only increase significantly worldwide, the prices for fertilizers have also risen due to production downtimes in Europe and Asia. The combination of having in their own hands natural resources needed for production or raw material gives ADNOC, like its compatriots Aramco, Gazprom and others, a financial advantage that is currently being monetized.
Further projects are to be published in the next few weeks, such as a new LNG investment offensive by the Abu Dhabi giant, but also the introduction of a comprehensive -proach to renewable energies to support its current strategy.
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So the main question: is ADNOC considering a major IPO like its Saudi competitor Aramco? The timing for such an IPO could be right as oil prices are above $ 80 a barrel. The listing of its national oil and gas giant on the stock exchange not only brings in additional money, which can even be described as “free cash”, and pushes for a more interesting integration into the global financial markets.
The challenges for NOCs like ADNOC or Aramco currently are not only to maintain their critical oil and gas strategy, but also to expand their non-hydrocarbon business. The huge investments required to build a (green) hydrogen division and c -ture a large part of the renewable energy market will not only be costly but also tricky. ESG and SDG activists will be very careful about supporting NOCs in the years to come. While oil is king, the NOCs need to make sure there is enough money to fund future growth. Diversification and transition are not che -.
By Cyril Widdershoven for Oil Genealogie
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