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Abu Dhabi National Oil (Adnoc) completed the sale of an additional 4% stake in subsidiary Adnoc Gas to institutional investors, raising USD 2.8 bn, according to a statement from the state-owned energy giant. The follow-on offering, which was priced at AED 3.40 per share, was 4.4x oversubscribed, after seeing books covered throughout the range of the offering, Reuters reports, citing one of the bookrunners.
The sale saw competitive pricing: The price is 43% higher than the gas unit’s IPO share price of AED 2.37, and comes at a 5% discount to its closing price of AED 3.58 yesterday.
Adnoc will retain an 86% majority stake in Adnoc Gas, with an agreement not to sell further shares for a period of six months from the closing of the sale, according to the statement.
The offering increases Adnoc Gas’ freefloat and paves the way for its inclusion in the MSCI Emerging Market Index and FTSE Emerging Market Index, possibly at the next quarterly review subject to Adnoc Gas meeting all the relevant inclusion criteria, the statement read. This will also “enhance trading and liquidity in Adnoc Gas’ ordinary shares and diversify its shareholder base.
This is the largest equity offering in the Mena region since Saudi Aramco’s USD 12.3 bn follow-on sale last June.
It is also the second follow-on sale for an Adnoc unit in as many years: The move also follows a USD 935 mn stake sale in Adnoc Drilling in May 2024, which led to the drilling unit’s inclusion in the MSCI Emerging Markets Index.
Adnoc Gas is on a growth run: The gas giant saw its bottom line grow 13% y-o-y in 2024 to USD 5 bn in 2024 driven by a 2% increase in sales volumes supported by higher contributions from Adnoc LNG and high demand for domestic gas. The firm’s top line was up 7% y-o-y to USD 24.43 bn over the same period. The UAE’s leading liquefied natural gas (LNG) supplier also manages the bulk of the country’s domestic gas distribution and operates an offshore export terminal, and is set to more than double its global LNG export capacity with its upcoming Ruwais facility, set for commissioning in 2028.
Refresher: Adnoc Gas raked in USD 2.5 bn in one of the region’s biggest IPOs in recent years in 2023.
ADVISORS- The state-owned energy giant enlisted BofA Securities, Citi, EFG Hermes, First Abu Dhabi Bank, HSBC, and International Securities as coordinators and bookrunners to manage the sale.
