Abu Dhabi’s ADNOC Distribution fuel firm IPO raises $851m

The fuel distribution unit of Abu Dhabi National Oil Company priced its initial public offering (IPO) at the mid-point of a revised indicative range, valuing the deal at Dhs3.1bn ($851m), the company said on Friday.

ADNOC Distribution priced each share at Dhs2.50, it said in a statement, compared with a revised indicative range of Dhs2.35-2.65 set last week.

The company sold 1.25 billion shares, or 10 per cent of its share capital. The stock will be listed and traded on the Abu Dhabi Securities Exchange (ADX) on December 13. Based on the offer price, the market capitalisation will be Dhs31.3bn.

This is the first IPO on the ADX in the last six years and the largest IPO in Abu Dhabi in a decade, the statement said.

“ADNOC Distribution’s strong business model, unique market position and attractive growth prospects has garnered healthy and solid demand for the IPO,” Sultan Ahmed al Jaber, group chief executive of state-owned ADNOC, said in the statement.

Local institutional investors accounted for 60 per cent of the offering, international institutions took 30 per cent while retail investors subscribed to the rest. The retail tranche was doubled to 10 percent from 5 per cent due to high demand.

ADNOC Distribution’s IPO has been launched after low oil prices hit revenues of Gulf and other oil producers.

Saudi Arabia plans to list 5 per cent of its national oil company Saudi Aramco by the end of 2018. Saudi officials say it could raise $100bn.

Tariq Qaqish, managing director for asset management at Mena Corp, said the IPO pricing offered upside for investors and aimed “to reactivate the IPO market in Abu Dhabi, to give more depth and add to the sectors in the index which is currently skewed to financial, banking and real estate.”

Abu Dhabi’s main share index dropped 0.8 per cent to 4,277 points on Thursday, the last day of the trading week.