By Sam Bridge
Additional 10% placement, valued at $1bn, means the company's free float will increase to 20%
Abu Dhabi National Oil Company (ADNOC) announced on Monday that it has successfully completed a placement to institutional investors of 1.25 billion shares in its distribution arm.
The shares in ADNOC Distribution, which are listed and traded on the Abu Dhabi Securities Exchange, represents 10 percent of the unit’s total share capital.
With this additional 10 percent placement, valued at $1 billion, the company’s free float will increase to 20 percent, contributing to improved liquidity of ADNOC Distribution shares, the company said in a statement.
At the time of ADNOC Distribution’s initial public offering in 2017, ADNOC conveyed its intention to sell more of its shareholding in ADNOC Distribution to increase the stock’s free float and liquidity on the ADX and provide an attractive investment opportunity, while continuing to hold a majority strategic stake in the company.
ADNOC said this transaction is part of its stated strategy and its continued focus on value creation. The placement was priced at AED2.95 per share, which is 18 percent above the IPO price of AED2.50 and represents a 5 percent discount on the company’s three-month volume weighted average price.
ADNOC will own 80 percent of ADNOC Distribution’s registered share capital following the placement.
ADNOC said it launched this placement due to "significant investor demand" for ADNOC Distribution stock and has delivered the largest block placement of a publicly listed GCC company to date.
Dr Sultan Ahmed Al Jaber, ADNOC Group CEO, said: "This transaction highlights the attractive nature of ADNOC Distribution to investors... It also contributes to increased liquidity in the trading of shares in ADNOC Distribution, while broadening the shareholder base."
ADNOC Distribution is a leading fuel distributor and convenience store operator in the UAE. As at the end of June, it operates 406 retail fuel service stations in the UAE and two retail fuel service stations in Saudi Arabia.
In its Q2 results announcement, ADNOC Distribution confirmed that its 2020 dividend policy is set to continue with an increase of 7.5 percent to AED2.57 billion, after a 62 percent increase in the 2019 dividend to AED2.39 billion.