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Abu Dhabi’s ADQ reportedly picks banks for Etihad Airways IPO

The sovereign fund may add more banks later and the final lineup of advisers may change as there is no final decision on the timing of the IPO

by Kudakwashe Muzoriwa

March 8, 2024

ADQ taps banks for Etihad Airways IPO, says reports

Image courtesy: Mehmet Eser/ Getty Images

Abu Dhabi’s ADQ is reportedly working with advisers including Citigroup, HSBC Holdings and First Abu Dhabi Bank (FAB) for a potential initial public offering (IPO) of Etihad Airways.

Rothschild & Co is acting as an independent financial adviser to ADQ, the smallest of Abu Dhabi wealth funds and owner of the UAE’s national carrier, according to a Bloomberg report.

The sovereign fund may add more banks later and the final lineup of advisers may change as there is no final decision on the timing of the IPO.

Antonoaldo Neves, the CEO of Etihad Airways told reporters on Wednesday that the carrier is working to be ready for an IPO whenever the shareholder decides the time is right.

Neves, who listed Brazilian carrier Azul in 2017, did not confirm Etihad IPO or give any details.

“As the management, we have the obligation and whenever is the proper time to do an IPO, we are going to be ready,” he said, adding that the decision was for ADQ.

“Etihad has not yet filed for an IPO. Otherwise if one day it happens in the next three months, six months, one year or two years. We’re going to be ready to evolve and it is my obligation.”

ADQ has been evaluating whether to pursue a traditional IPO as well as a direct listing. Etihad’s listing would be the first privatisation of a major legacy airline in the GCC region.

Etihad’s growth strategy

Meanwhile, Etihad reported a five-fold increase in profit, driven by the airline’s expanded network as it taps the growing demand for air travel post-pandemic.

The airline expanded its global network to 72 destinations in 2023. It added 15 new destinations to its global network last year including Lisbon, Copenhagen, Kolkata and Osaka.

Etihad carried 14 million passengers in 2023, a 40 per cent year-on-year increase from a year earlier. The carrier’s full-year passenger revenue came in at $1.1bn (Dhs4bn) while its net profit stood at $143m (Dhs525m).

The group’s passenger load factor stood at 86 per cent in 2023, up from 82 per cent the previous year.

Etihad’s total revenue rose to Dhs20.3bn in 2023 compared to Dhs18.3bn a year earlier.

The company strengthened its balance sheet by reducing net leverage to 2.5x net debt to EBITDA, from 5.0x in 2022, driven by strong cash-flow generation, controlled capital expenditure and the re-activation of previously parked aircraft.