ADNOC to float 15% stake in logistics subsidiary

Abu Dhabi National Oil Company (ADNOC) is planning to sell a 15% stake in its maritime logistics subsidiary ADNOC L&S in an IPO, according to its intention to float (pdf). The offering will see ADNOC sell 1.1 bn company-owned shares. Reports indicating that the oil giant was maneuvering to float its logistics subsidiary had surfaced in March.

The details: The company will announce its shares’ indicative price range and open the door for retail and institutional investors’ subscriptions next Tuesday, 16 May. The retail portion of the offering will close on 23 May, while institutional investors will have until 24 May to submit their bids. The final price offer will be announced on 25 May, before the company lists its shares on Abu Dhabi’s ADX on 1 June.

The IPO will help fuel the company’s growth: ADNOC L&S is planning to spend some USD 4-5 bn in capital expenditure in the medium term, according to the announcement. The investments will go towards expanding the scope of services provided by ADNOC’s subsidiaries, decarbonization efforts, and scaling up ADNOC L&S’ shipping, integrated logistics, and services platform operations. Wider international operations and the development of new business verticals were also cited as targets for investments in the announcement.

What they said: “Our planned IPO offers an exciting [chance] to accelerate our growth, supporting ADNOC Group with its ambitious growth strategy, while further expanding the services provided to our customers and exploring new geographical areas and business verticals,” ADNOC L&S CEO Abdulkareem Al Masabi said. “As the sixth company ADNOC is bringing to market, ADNOC L&S is ideally placed to drive performance, deliver value, and capitalize on both ADNOC's ambitious growth roadmap and the growing global demand for lower-carbon, reliable energy supplies,” Khaled Al Zaabi, group CFO at ADNOC, added.

ADNOC has been on an IPO spree: The company raised USD 2.5 bn in a listing of its gas subsidiary earlier this year, a transaction which still stands as the world’s second largest IPO of the year thus far. That offering was preceded by earlier listings of other subsidiaries in the ADNOC Group’s portfolio, including the sales of stakes in the company’s drilling unit, fertilizer producer Fertiglobe, and chemical subsidiary Borouge.

Advisors:Moelis & Co has signed on as the independent financial advisor for the offering. Citigroup, First Abu Dhabi Bank, HSBC Bank Middle East, and JP Morgan Securities are acting as global coordinators and bookrunners, while Abu Dhabi Commercial Bank, Arqaam Capital, Crédit Agricole, EFG-Hermes UAE, International Securities and Société Générale will also offer their services as bookrunners. Abu Dhabi Islamic Bank, and Al Maryah Community Bank have been appointed as receiving banks, while First Abu Dhabi Bank was chosen as lead receiving bank.