Abu Dhabi National Oil Co. (ADNOC) has successfully completed its $2 billion initial public offering (IPO) for its subsidiary, ADNOC Gas.
The IPO was oversubscribed within hours of the book opening, indicating a strong demand for Middle Eastern stock sales, according to a report by Bloomberg.
The oil giant is selling a 4 percent stake in ADNOC Gas, offered between AED2.25 and AED2.43 per share. This has been fully covered, making it the biggest IPO in the UAE this year.
The IPO also attracted cornerstone investments from several funds, including Alpha Dhabi and International Holding Co., as well as Abu Dhabi state-linked entities, who committed $850 million.
ADNOC Gas’ valuation
ADNOC Gas will be valued at $50.8 billion at the high end, making it one of the world’s largest listed gas firms, and the biggest IPO in Abu Dhabi if priced at AED2.43, surpassing chemicals firm Borouge’s deal in mid-2022.
The IPO is part of a wider effort by governments in the Gulf to bring in more international investors and fund a transition away from fossil fuels, the report said, adding that this effort, along with surging oil and gas prices, helped the UAE and Saudi Arabia defy the global IPO slump in 2022.
ADNOC Gas is expected to pay dividends of $3.25 billion for 2023, and it has a production capacity of 10 billion cubic feet a day across eight onshore and offshore sites, and a pipeline network of more than 3,250 kilometers.
The subsidiary has already made record underlying earnings of $8.7 billion in the year through October 2022, with the strong performance attributed to soaring gas prices after Europe rushed to secure supplies from other regions following the Russia-Ukraine conflict.
The UAE, with the world’s seventh-largest gas reserves, is a key supplier for Europe, and this month delivered Germany’s first-ever cargo of liquefied natural gas from the Middle East.
ADNOC Gas is expected to be at the forefront of the UAE’s push to triple its LNG export capacity to about 15 million tons annually in the next few years.
The final pricing announcement for the IPO is expected on March 3, with trading set to begin on March 13, the report added.
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