Adnoc L&S IPO starts with a bang

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What we're tracking today

TODAY: Turkish elections delay resumption of Iraqi oil exports to Turkey + Container line between Jebel Ali and Iran’s Bushehr Port coming this year

Good morning, ladies and gentlemen. We have another brisk issue for you today, with updates on the Adnoc L&S IPO, and some details on Iraq’s mega Development Road Project.

THE BIG LOGISTICS STORY- Adnoc Logistics & Services’ IPO — which will see the company list a 15% stake on the ADX — kicked off to massive investor demand yesterday, with its order books covered within minutes of books opening.

HAPPENING TODAY-

Turkish elections delay resumption of Iraqi oil exports: Turkish elections have further delayed the resumption of Iraqi crude oil exports to Turkeys’s Ceyhan port, Reuters reports, citing industry and government sources. The oil exports were expected to resume last week after they had been halted following an arbitration ruling. The outcome of the election, in which neither candidate achieved the required 50% of votes, has forced Turkey to hold a run-off on 28 May. Meanwhile, operators at the Turkish port of Ceyhan have yet to receive instructions to prepare for the resumption of oil flows, Reuters reports, citing a source close to the matter.

WATCH THIS SPACE- Iran and the UAE are set to launch a direct container linebetween the UAE’s Jebel Ali port and Iran’s Bushehr Port before the end of September, according to an Iran Chamber of Commerce statement. Iranian Roads and Development Minister Mehrdad Bazrpash visited the UAE this week to enhance bilateral trade. Iran has already completed discussions and coordination efforts with provincial authorities, and has secured an agreement with an Iranian investor for the implementation of the shipping line, according to the director of a local office of the Ports and Maritime Organization in Bushehr Province, Mohammad Shakibinasab. Goods currently reach Bushehr Port through a transfer from Jebel Ali Port to the Port of Shahid Rajaee in Bandar Abbas.

CIRCLE YOUR CALENDAR-

The UAE Maritime Week kicked off this week at the Dubai World Trade Centre, and is running until Friday. The week will bring together stakeholders from local maritime markets in a series of in-person events and conferences to explore maritime opportunities across the UAE.

The Seatrade Maritime Logistics Middle East kicked off yesterday at the Dubai World Trade Centre, and will continue until Thursday. The conference, which will comprise a trade show, conference tracks and networking, will connect ship owners, shipyards, port operators, government representatives, and industry professionals from across the MENA region.

The 35thIATA Ground Handling Conference, hosted by Etihad, kicked off yesterday at the Abu Dhabi National Exhibition Center, and runs until Thursday. The event brings together global industry leaders from airlines, airports, ground service providers and manufacturers to network and discuss industry trends and developments.

TheElectric Vehicle Innovation Summit 2023 will take place in Abu Dhabi between 29-31 May. The event is the first of its kind in the MENA region and brings together researchers, engineers, officials, and organizations involved in the EV scene, presenting attendees with opportunities to network across value chains and exchange ideas.

The 79th IATA Annual General Meeting and World Air Transport Summit will take place from 4-6 June, in the Hilton Bomonti in Istanbul, Turkey. The event will gather airline leaders from across the globe to discuss post-pandemic aviation, airline sustainability, operational challenges from the past year and the future of aviation, according to the event program (pdf).

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

Adnoc L&S bookbuilding kicks off to massive investor demand

Orders for the IPO of Adnoc’s logistics subsidiary, Adnoc L&S, sold out within minutes of books opening yesterday, Bloomberg reports. The company is selling 1.11 bn shares — a 15% stake — at AED 1.99-2.01 apiece, which would value the subsidiary at up to USD 4.05 bn, according to a statement (pdf). The high end of the spread could see Adnoc raising as much as USD 607 mn from the offering, potentially making it the second biggest IPO in the Middle East this year, after the listing of Adnoc Gas.

The company has already secured USD 180 mn in cornerstone investments: The company entered into cornerstone investment with Al Seer Marine Supplies and Equipment, which pledged USD 70 mn for a portion of the offered shares; National Marine Dredging Company, who pledged USD 30 mn; and ADQ’s Alpha Oryx and the Abu Dhabi Pension Fund, each of which pledged USD 40 mn. The investors have committed to purchasing shares at the final offer price, which will be announced on 25 May, according to the statement. The shares are subject to a 12-month lock-up arrangement, it added.

The timeline:The retail offering is scheduled to remain open until 23 May, with institutional investors having until 24 May to submit their bids. Trading on the company’s shares will begin on the ADX on 1 June.

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.

Adnoc has been on an IPO spree for its subsidiaries: The company raised USD 2.5 bn in a listing of its gas subsidiary earlier this year in 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.

Iraq’s Development Road Project connecting it to Turkey will cost USD 17 bn

Iraq’s Development Road Project linking its Southern Faw Port to Turkey by rail will cost USD 17 bn to complete, IraqiNews Agency (INA) quotes the general manager of Iraq’s state-owned Iraq Republic Railways, Younus Khalid, as saying. The Development Road Project includes the construction of the railway connecting the countries, as well as a highway that will be built in parallel, with the first phase slated for completion in 2028.

The project is set to bring the country some USD 4.85 bn in revenues, with the expected volume of revenues from cargo carried amounting to USD 4 bn, while passenger-generated revenue is expected to reach some USD 850 mn per year, Khalid said.

The numbers: The cost for the railway is expected to be USD 10.5 bn, while the highway will cost some USD 6.5 bn, amounting to a total of around USD 17 bn for the whole Development Road Project, Khaled said.

The preliminary and final feasibility studies have been completed for the project, with the project now in the design stage, according to Khalid. Once the designs are complete, an invitation will be sent out to companies in the railway industry to submit bids for the construction of the project. The expected completion of the Development Road will be split into three phases, with the third phase wrapping up by 2050, Khalid told INA. The country’s Transport Ministry had earlier said that the project’s implementation phase will begin in 2024.

Background:The freight train will pass through 10 Iraqi provinces, the last of which is Nineveh, which will connect to Turkey. Some 60 km of rail between the ports of Faw and Umm Qasr have been built, according to Al Safi. The train will have an initial capacity of 3.5 mn containers and will be able to carry 22 mn tons of bulk cargo per year, before expanding to 7.5 mn containers and 33 mn tons per year. The highway will span a length of 1.2k km according to the news agency.

Menzies Aviation expands in Latin America with acquisition of Aircraft Services in Panama

Agility subsidiary Menzies Aviation is expanding its presence in Latin America with the acquisition of Aircraft Services and Consulting in Panama, according to a company statement. The statement does not disclose the size of the acquired stake or the value of the acquisition.

The rationale: The UK-based company acquired Aircraft Services in a bid to extend its service offerings to Tocumen International Airport — the largest airport in Central America — and Scarlett Martinez International Airport. The acquisition will also allow it to obtain operating licenses for David Airport and Panama Pacifico Airport.

This is Menzies’ second acquisition this year: Last month, Menzies inked a subscription agreement to acquire a 50.1% stake in TAP Air Portugal’s aviation services subsidiary, Groundforce.

The Agility subsidiary now operates in seven countries in Latin America: “We are excited to add our seventh country in Latin America and our 46th and 47th airports respectively in this important and growing market,” Menzies Aviation Americas Executive Vice President John Redmond said.

REFRESHER- Agility Logistics completed a GBP 763 mn acquisitionof Menzies Aviation last year and combined its business with NAS to create the “world’s largest aviation services company by number of countries.”

AD Ports reports surge in income in 1Q 2023

TheUAE’s AD Ports Group saw its net income grow 18% y-o-y to AED 363 mn in 1Q 2023, according to the company’s earnings release. Group revenues surged by 73% y-o-y to AED 1.8 bn in the same period. The strong performance of its maritime, economic cities and freezones, and ports clusters — along with new acquisitions made in FY2022 and Q1 2023 — were the main drivers behind the surge in revenues, the company said.

Breakdown: The maritime cluster recorded a 259% y-o-y spike in revenues to AED 915 mn on the back of capacity increases, wider service offerings and boosted activity in new business segments, which include marine, feeder and offshore services. Its performance was also buoyed by new acquisitions made — Divetech, ASCL, Safeen Subsea and Transmar and TCI — accounting for 30% of maritime cluster revenues for the quarter. The economic cities and freezone cluster’s topline also grew 13% y-o-y to AED 429 mn, fueled by previously signed leases, higher utilities revenues and the Al Eskan Al Jamae (EAJ) merger. The ports cluster also recorded a 24% y-o-y spike in revenues to AED 314 mn in 1Q 2023 — driven by an 18% y-o-y in container volumes on the back of gradual recovery from covid-19 and supply chain disruptions on top of higher container utilization rates.

The logistics cluster went against the trend with revenues falling 3% y-o-y to AED 139 mn in 1Q 2023, due to the temporary maintenance shutdown of a “strategic customer’s” production plant, and the end of its covid-19 vaccine delivery business.

Looking ahead: The company plans on completing its 100% acquisition of logistics service provider Noatum by 2Q 2023, as well as finalizing the purchase of an 80% equity stake in Dubai-based container shipping company Global Feeder Shipping by 3Q 2023, increasing its global footprint in its logistics and freight forwarding business.

Admiral Mobility + Avis to provide electric trucks for lease in the UAE

Admiral Mobility + Avis to provide leasing solution for largest fleet of electric trucks in the UAE: US appliance manufacturer Admiral’s mobility arm,Admiral Mobility, and car rental company Avis have agreed to introduce electric commercial trucks to the UAE’s leasing market under a strategic partnership, according to a press release. The number of trucks for lease was not disclosed.

The details: The electric trucks, split between six and eight tons, will boast a range of 220 km and will take less than 90 minutes to fully charge. The vehicles have seen in-depth testing over the last six months to guarantee their operational and commercial viability for the GCC market.

Background: Admiral Mobility had signed an agreement with Geely Fairzon New Energy Commercial Vehicle Group last December to establish a plant to assemble 5k electric commercial vehicles — including 3k electric trucks — in the Middle East.

About Admiral Mobility + Avis: Admiral Mobility was established in 2022 as the business arm of American electrical appliance brand giantAdmiral Corporation of America. Avis, founded in 1946, offers rental and leasing solutions across the UAE — their fleets include commercial vans, trucks, pickups and bespoke vehicles.

Etihad Cargo rolls out AI-powered solutions + MSC adds Jeddah Port to Asia shipping line

AVIATION-

Etihad Cargo has rolled out AI-powered solutions to optimize cargo capacity and increase efficiency, according to a press release. The step follows the conclusion of a proof-of-concept agreement with Singapore-based Speedcargo Technologies that saw Etihad Cargo run successful trials of the company’s AI logistics solutions. The freight carrier will introduce three AI products — Amplifi, Cargo Eye, and Assemble. Ampfil allows Etihad to optimize cargo loads on its trips while Cargo Eye and Assemble smoothe operations relating to ground handling. Etihad Cargo’s ground handlers in Singapore have already started using the new AI tools, and the company plans to extend their use globally, the press release explained.

SHIPPING-

MSC has added Jeddah Islamic Port to its Dragon container shipping line connecting Asia to Mediterranean ports, according to a statement by Saudi Ports Authority (Mawani). The weekly route, launched in early May, connects Jeddah Islamic Port to hubs in Southern Europe and East Asia. The container line will be operated by 12 vessels with an average 15k TEU capacity, according to the release.

Direct flights between Bahrain and Qatar are set to resume on 25 May, two years after an Arab boycott of Qatar was lifted. (Bahrain News Agency)
Etihad Airways is set to launch a new flight service from Abu Dhabi toOsaka, Japan, operating five times per week starting from 1 October, in a bid to boost bilateral trade and tourism ties and to offer an additional route to Japan alongside the existing Tokyo service. (WAM)

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.

15-17 May (Monday-Wednesday): Global Fleet Conference, Cascais, Portugal.

15-19 May (Monday-Tuesday): The UAE Maritime Week.

16-17 May (Tuesday-Wednesday): Africa Forum of Investment and Commerce, Sheraton Hotel, Algiers, Algeria.

16-18 May (Tuesday-Thursday): Seatrade Maritime Logistics Middle East, Dubai, UAE.

16-18 May (Tuesday-Thursday): Baltic and Black Sea Ports & Shipping, Radisson Hotel & Suites, Gdansk, Poland.

16-18 May (Tuesday-Thursday): IATA Ground Handling Conference, Abu Dhabi National Exhibition Center, Abu Dhabi.

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

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

18 May (Thursday): UN-Turkey-Russia Black Sea grain agreement extension expires.

18-19 May (Thursday-Friday): XIV International Russia—Islamic World: KazanForum, Kazan Expo, Kazan, Russia

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

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.

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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