ADNOC looks to raise $2bn from IPO

ADNOC looks to raise $2bn from IPO
ADNOC plans to issue an IPO of its fuel-retailing unit
Published: 27 November 2017 - 6:40 a.m.

Abu Dhabi National Oil Company (ADNOC) may raise as much as $2bn from an initial public offering of its fuel-retailing unit, according to people with knowledge of the matter.

The crude producer will price the IPO for ADNOC Distribution in a range of AED2.35 (64 U.S. cents) to AED2.95 a share, said the people, who asked not to be named as the matter is private.

Based on that estimate, the unit is valued at $8bn to $10bn.

ADNOC plans to announce the IPO price range on Sunday.

ADNOC wasn’t immediately available for comment.

The final amount of shares sold and proceeds raised will depend on investor demand, the people said.

ADNOC would raise as much as $2bn if it sells 20% of the company at the top end of the range, they said. The final amount could be more in the $1bn-to-$1.5bn range, one of the people said.

The company said last week that it plans to offer 1.25bn to 2.5bn shares in the sale, with the stock expected to begin trading on Dec 13.

ADNOC posted earnings before interest, tax, depreciation and amortization of 2.1bn dirhams last year.

The IPO is among several expected in the Middle East, including that of Saudi Aramco, as oil-rich Gulf governments sell assets to raise cash to diversify their economies after crude prices slumped.

ADNOC will try to sell stakes in some units and seek partners for others, the company's CEO Sultan Al Jaber said in an interview this month. The company, which raised $3bn in bonds last month, is putting chunks of separate operating units up for sale instead of selling a piece of the parent company. ADNOC, which pumps most of the crude in the UAE, allows foreign firms to join in partnerships that give them a stake in the emirate’s oil.

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