Adnoc L&S IPO just got bigger

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What we're tracking today

TODAY: UK-GCC trade talks continue this week + Iran, Russia make more progress on transport corridor

Good morning, friends. It’s shaping up to be a busy week in the logistics world, with plenty of updates on the shipping front and in capital markets.

THE BIG LOGISTICS STORIES- Adnoc L&S has upped the size of its IPO on strong investor demand, while DP World has launched the first direct freight service between Jebel Ali and Iraq’s Umm Qasr Port.

HAPPENING THIS WEEK-

The UK’s Secretary of State for Business and Trade Kemi Badenoch is set to visit Qatar, Saudi Arabia, and the UAE this week to discuss a trade agreement with the six Gulf Cooperation Council (GCC) countries, Reuters reports. There are three more rounds to go in the UK-GCC trade talks, which started last year. Badenoch will take part in the Qatar Economic Forum today as part of the five-day trip, during which she will meet with GCC Secretary-General Jasem al Budaiwi as well as ministers from Qatar, Saudi Arabia, and the UAE.

Iran purchases ships from Russia for Russia-Iran transport corridor: Iran has inked an agreement to purchase ships from Russia’s North-South Corridor Convergence Club, in line with the Rasht-Astara railway agreement, CEO of the Islamic Republic of Iran Shipping Lines (IRISL) Mohammed-Rez Modaress Khiabini said, according to lran’s semi-official Tasnim News Agency. Some 26 vessels with 3.6k TEU capacity are currently being prepared to transport cargo to Russia, he said. The news agency did not disclose the value of the agreement or the exact timeline for the delivery of the vessels.

Background: Russia is investing EUR 1.6 bn in the Rasht-Astara railway, to be completed in four years, after Iran and Russia signed an agreement for the construction of the railway last week. The construction of this railway will complete the International 7.2 km North-South Transport Corridor, a network of ship, rail, and road routes connecting South Asia to Europe.

MARKET WATCH-

China has imported more oil from Russia than from Saudi Arabia so far this year,according to Chinese customs data picked up by Reuters. Year-to-date imports from Russia rose 26.5% to 32.4 mn tons, outpacing those from Saudi Arabia, which grew 2.9% to 31.3 mn tons. The volume of oil imports from KSA was higher in April, however, reaching some 8.46 mn tons during the month, compared to 7.1 mn tons imported from Russia.

Qatar, Algeria, and Oman were among the world’s 10 largest LNG exporters in April, according to a Gas Exporting Countries Forum (GECF) report for May 2023 (pdf). Qatar was the second biggest LNG exporter worldwide after the US, while Algeria was the seventh largest and Oman the ninth. Qatar’s position as runner-up came despite a y-o-y fall in exports of 0.38 metric tons. Egypt also saw its exports of LNG decline by 0.35 metric tons when compared to the same period last year on the back of lower availability of feed gas, the report said.

Global LNG exports in April leaped 6% y-o-y to settle at 35.58 metric tons with greater demand for clean energy driving the surge in export orders, according to the report. Part of the boost was attributable to annual increases of 0.33 metric tons in Algeria and 0.06 metric tons in the UAE’s exports, according to the GECF report.

Arab countries exported a combined 29.5 mn tons of LNG in 1Q 2023, rising 7.1% y-o-y, according to an Organization of Arab Petroleum Exporting Countries (OAPEC) report picked up by Youm7. The increase came on the back of higher export volumes from Algeria, Qatar, and Oman, while Arab exporters together retained a 28.2% share of global LNG exports.

CIRCLE YOUR CALENDAR-

The Seamless Middle East 2023 summit will take place in the Dubai World Trade Center today and tomorrow. This event brings together industry experts across the payment, fintech, banking, retail, e-commerce, digital marketing, home delivery, cards, and identity industries.

The Second Fleet and Mobility Summitwill kick off tomorrow. The event will bring together key stakeholders to extend their knowledge base and explore the technology and practices that will shape the future of their buisnesses.

Bloomberg’s Qatar Economic Forum will take place in Doha today and tomorrow. The event will see discussions about major economic issues facing CEOs, heads of state, and money markets. QFZ will be participating in the event to discuss the global economic climate and its impact on FDI globally, according to a statement.

The Turkey-Iraq Trade Summit ends today after a three-day run in Kirkuk and Erbil, Iraq. The event saw the participation of dozens of Turkish companies as well as the Kurdistan Regional Government’s (KRG) trade and industry minister and a host of Turkish and Iraqi officials. The event aims to boost bilateral trade between Turkey and Iraq and to establish Iraq as the second largest destination for Turkish exports.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

Adnoc bumps size of Adnoc L&S IPO on strong investor demand, a day before subscription closes

Adnoc has upped the size of the offering of its logistics unit, Adnoc L&S, on the back of strong investor demand, according to a company statement (pdf). ADNOC is now offering a 19% stake (1.41 bn shares), up four percentage points from its originally planned 15% stake sale (1.11 bn shares). The offering could now raise up to USD 769 mn if the IPO prices at the top end of the set USD 1.99-2.01 price range. The subscription period for the retail tranche ends today, while the tranche for investors will remain open until tomorrow. Trading on the company’s shares will begin on the ADX on 1 June.

The breakdown: The company has increased the size of the retail tranche to 12% of the total offering, up from 9% originally, while the second tranche for institutional investors accounts for 85% of the sale. The third tranche — reserved for employees of Adnoc group and retirees — accounts for the remaining 3% of the offering.

“We have witnessed exceptional demand across all tranches, with significant interest across the local, regional and global investment community in this unique opportunity, reflecting Adnoc L&S’ strong growth prospects as a critical enabler of Abu Dhabi and the UAE’s supply of energy to the world while driving the decarbonization of the UAE maritime sector,” Group CFO of Adnoc Khaled Al Zaabi said.

Refresher: The proceeds raised from the transaction will go towards meeting part of the expenses for Adnoc’s ambitious USD 4-5 bn medium term growth strategy. The strategy includes investments towards expanding the scope of Adnoc subsidiary services, decarbonization efforts, as well as scaling up Adnoc L&S’ shipping, integrated logistics, and services platform operations.

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.

DP World launches direct freight service between UAE and Iraq

The UAE’sDP World launched its first commercial direct freight service between the UAE’s Jebel Ali Port and Iraq’s Umm Qasr Portto make the flow of goods between the countries safer, faster, and more efficient, according to the Dubai Media Office. DP World’s maritime logistics subsidiary, P&O Maritime Logistics Transports, will operate the service, which will also run under its name.

The details: The direct trailer-ferry service will connect UAE’s Jebel Ali port to Umm Qasr port in southern Iraq within approximately 36 hours, and will run on a weekly basis. The goods can be transported on a UAE-plated trailer, which is then loaded onto a ferry and carried to the Iraqi port, according to the service’s website.

The route helps save time + avoid damage to goods: Emirati exporters who transport goods to Iraq have been using two overland routes passing through three countries — Saudi Arabia, Kuwait, and Jordan — to reach Iraq in a journey that can take up to 14 days. Due to each country’s respective requirements, which may require goods to be reloaded onto local trucks, the goods being transported are at risk of damage, the service said. The new direct ferry-trailer route eliminates border delays and allows UAE-plated trucks to deliver the goods to their destinations in Iraq under a special agreement DP World has signed.

Who will use the service? Transport, logistics, and export and import firms, according to the website. P&O is also looking to attract players in the electronics, food and beverage, oil and gas, construction, automotive, machinery, manufacturing and technology sectors, all of which see trade happen extensively between the two countries.

The service already has customers: Emirati freight forwarder ADSO Group was the first to use the direct service, according to Post and Parcel. The new service “delivers great logistical efficiencies across our operations, we benefit from cost-savings by reducing our time spent on the road and crossing borders,” Post and Parcel quotes ASDO General Manager Riaz Karmali as saying.

Alstom looking to debut hydrogen trains in KSA before year’s end

French rail giant Alstom plans to introduce its hydrogen-powered train to Saudi Arabia before the end of the year, Alstom’s GCC Managing Director Tamer Salama told Zawya. The debut will most likely coincide with the upcoming Future Investment Initiative (FII) conference, which is scheduled to take place in Riyadh by October, Salama said.

On the lookout for hydrogen suppliers: Alstom is seeking partners to provide hydrogen for its project, Salama added. “We are engaged in discussions with several sources fully supporting the initiative,” Almstom’s GCC chief said. Alstom expects widespread availability of hydrogen fuels in the GCC as green hydrogen projects in the UAE, NEOM, Oman, and Qatar get underway, Salama told Zawya.

Background: Salama’s statements follow an MoU Alstom signed with Saudi Arabian Railways late last year to develop hydrogen train solutions for KSA. Hydrogen-powered railways, together with electrified railways, are expected to make sizable contributions to Saudi’s net-zero target for 2060.

US ports are suffering from an import “hangover” + Alibaba spins off cloud division

US ports are experiencing a “hangover” from the shipping surge in 2021 + 2022: Seaports in the US are facing a challenging year, with imports falling y-o-y at double digits for months, despite consistently seeing monthly increases of imports,the Wall Street Journal reports. Business has been rising on a m-o-m basis, surpassing box volumes pre-pandemic in 2019. “It sounds like the sky is falling,” an analyst at Bloomberg Intelligence said. “But when you are looking relative to where we are today versus [before the pandemic] we are up mid-single digits.” Shipping industry officials say the figures suggest a return to normal trade patterns rather than a cargo collapse.

China’s Alibaba Group is fully spinning off its cloud division through a stock dividend distribution to shareholders, CEO Daniel Zahang said in the company’s earnings release. The parent company surpassed earnings expectations with net income increasing 39% y-o-y to RMB 65.6 bn during its fiscal year, which ends on 31 March, while revenues rose 2% y-o-y to RMB 868.7 bn during the same period.

UAE’s Sharaf Group partners up with SMAG on logistics services. PLUS: News from Densay Shipping, Gulfnav and Transworld

SHIPPING-

UAE shipping firm Sharaf Group and Italy’s SMAG have inked an MoU oncooperation in logistics and shipping services, according to WAM. The two sides will work to enhance trade and investment cooperation in several areas including air and sea freight, warehousing, and logistics services. The signing took place at the Investopia Europe event in Milan during a visit by UAE Economy Minister Abdullah bin Touq Al Marri to explore investment opportunities between the UAE and Italy in renewable energy, tourism, and fintech.

Dubai-based Densay Shipping has booked orders for six ultramax bulk carriers at Chinese shipyards, according to Splash. The shipping outfit has ordered two vessels each at China Merchants Jinling Shipyard, Nantong Xiangyu Shipbuilding and Offshore Engineering, and New Dayang Shipbuilding, with deliveries slated for 2024 and 2025. The orders cost between USD 32 – 35 mn apiece. Densay currently owns 39 ships with a further three ultramax vessels on order at Japan’s Imbari shipyard slated for delivery in 2023 and 2024.

MARKETS-

Dubai-based Gulf Navigation (Gulf Nav) has carried out an AED 638k capital reduction via shares cancellation, according to a DFM filing (pdf). The action was implemented through the cancellation of c.637.7 shares, nominally valued at AED 1 apiece on a pro rata basis, representing a 50% reduction in shareholder equity.

Remember: The shipping firm recently sold a USD 27 mn petrochemical tanker to Classical Oil Field Chemicals (FZCO) to allow it to pay off an USD 11.7 mn loan and to help solidify its liquidity position. The company has been restructuring all of its loans in order to pay off most of its debt and reduce the total cost of its borrowing. It also exited unprofitable sectors and restructured its business to focus on maritime operations, ship management, and agency services.

Transworld wants to take Shreyas private: Dubai-based Transworld Group plans to delist shares of its Indian subsidiary Shreyas Shipping & Logistics (SSL), according to a statement (pdf). SSL is a container feeder operator with shares listed on India’s National Stock Exchange and the Bombay Stock Exchange. Transworld’s management cited “enhanced operational flexibility” as the reason for taking SSL private, and said that share pricing will be determined through reverse book building, according to the press release.

The caveat: Indian securities regulations require Transworld to control a minimum 90% stake in SSL in order to execute the transaction. It currently only owns a 70.44% stake, with plans to buy the remaining shares from public shareholders “at a fair price,” according to the statement.

_! Norway’s OSM + Singapore’s Thome merger approved by authorities

OSM + Thome merger gets regulatory green light: Regulators have approved the merger of OSM Maritime Group and Thome Group in what is reportedly “the largest ship management merger ever,” according to a press release. The merged entity, OSM Thome, will be based in Norway with operations in 22 countries, the release said. OSM Thome, whose clients include some of the world’s most prominent shipping outfits, manages nearly 450 ships and is responsible for crewing an additional 500. The firm’s fleet cuts across various segments including tank, bulk, container, car ships and offshore vessels, according to the statement.

The approved merger could take up to a year to complete, and the company currently has no other targets for consolidation in the sector, OSM CEO Finn Amund Norbye said, according to Splash247.

Calendar

MAY

May: The Suez Canal Economic Zone (SCZone) plans to hand over a new 1k-meter container berth to the East Port Said Port.

May: The ArabAcademy for Science, Technology and Maritime Transport (AAST) will roll out its first locally-made electric cargo transport vehicle.

16-23 May (Tuesday-Tuesday): Subscription window will be open for retail Investors for the Adnoc L&S IPO.

16-24 May (Tuesday – Wednesday): Subscription window will be open for institutional investors for the Adnoc L&S IPO.

24 May (Wednesday): Fleet and Mobility Summit, Dubai.

23-24 May (Tuesday-Wednesday) Seamless Middle East 2023 summit, Dubai World Trade Center.

29-31 May (Monday-Wednesday): Translogistica Libya 2023, Misurata, Libya.

29-31 May (Monday-Wednesday): Electric Vehicle Innovation Summit 2023 Adnec, Abu Dhabi

JUNE

June: Suez Canal Economic Zone holds a roadshow in Delhi.

1 June (Thursday): Listing of shares on ADX, Adnoc L&S IPO

4-6 June (Sunday-Tuesday): IATA Annual General Meeting and World Air Transport Summit, Hilton Bomonti Hotel, Istanbul, Turkey.

6-7 June (Tuesday-Wednesday): Ports and Customs Week, Cape Town, South Africa.

12-15 June (Monday-Thursday): Saudi Plastics & Petrochem, Riyadh, KSA.

14-16 June (Wednesday-Friday): International Conference on Models and Technologies for Intelligent Transportation Systems, Nice, France.

20-23 June (Tuesday-Friday): Conference on the Marine Transportation System Innovative Science and Technologies Toward Greater Sustainability, Washington, DC, US.

JULY

1 July (Saturday): A new greenfield liquid bulk terminal in Khalifa Port Abu Dhabi will kick off operations.

1 July (Saturday): New UAE Federal Tax Authority VAT Ecommerce rules take effect.

16-17 July (Thursday-Friday): The Levitate Conference and Exhibition, St. Regis Amman Hotel.

24-25 July (Monday-Tuesday): ICSG Istanbul, Istanbul Lutfi Kirdar Convention & Exhibition Centre, Istanbul.

SEPTEMBER

5 September (Tuesday): The Leaders in Logistics KSA Summit, Riyadh.

20-22 September (Wednesday-Friday): Transport Evolution Africa Forum and Expo, Inkosi Albert Luthuli ICC Complex (Durban ICC), South Africa.

OCTOBER

3-5 October (Tuesday-Thursday): Smarter Mobility Africa Summit, South Africa.

NOVEMBER

1 November (Wednesday): Smart Maritime Network Dubai Conference, Conrad Dubai, UAE.

14-15 November (Tuesday): Supply Chain & Logistics Arabia, Narcissus, Riyadh, Saudi Arabia.

15 November (Wednesday): Leaders in Logistics UAE Summit, Dubai.

21-23 November (Tuesday-Thursday): Intermobility Expo 2023, Dubai World Trade Center, Dubai, UAE.

EVENTS WITH NO SET DATE

2H2023:Construction of Neom’s first hydrogen fueling station will kick off.

2H2023: Expansion of Baghdad International Airport to begin.

2024

FEBRUARY 2024

12-13 February (Monday-Tuesday): Breakbulk Middle East conference, Dubai Trade Centre.

12-15 February (Monday-Thursday): African Air Expo, Cape Town.

28 February-1 March (Wednesday-Friday): MENA Transport Congress and Exhibition 2024, Dubai.

MARCH 2024

12-14 March (Tuesday- Thursday): IATA World Cargo Symposium, Hong Kong International Airport.

MAY 2024

2-3 May (Thursday-Friday): Geneva Dry, Geneva, Switzerland, Hotel President Wilson.

2025

Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

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