Fertiglobe surges 20% in Abu Dhabi debut after $795m IPO

Fertiglobe Holdings, the fertilizer maker backed by US hedge fund investor Jeff Ubben and a Singapore wealth fund, jumped 20 per cent on its trading debut following a $795m initial public offering.

The shares opened at Dhs3.06 on Wednesday in Abu Dhabi. State-controlled Abu Dhabi National Oil Co. and OCI NV had sold just under 14 per cent of Fertiglobe at Dhs2.55 per share, valuing the company at $5.8bn.

Fertiglobe’s listing is the emirate’s third largest. Singapore sovereign wealth fund GIC and Ubben’s Inclusive Capital Partners committed $150m between them to the deal.

#ADNOC MD & GCEO and Fertiglobe Chairman, H.E. Dr. Sultan Al Jaber, shares his thoughts on Fertiglobe’s listing and first day of trading on the Abu Dhabi Securities Exchange (ADX), which marks the first listing of a free zone company on an onshore stock exchange in the UAE. pic.twitter.com/gaqfmgASE4

— ADNOC Group (@AdnocGroup) October 27, 2021

The IPO is the latest in a series of heavily-oversubscribed listings in the UAE and neighbouring Saudi Arabia. A surge in oil prices has boosted both economies and liquidity on their equity markets.

Earlier in October, ADNOC’s drilling unit rose about 30 per cent on its trading debut after a $1.1bn IPO. In Riyadh, utility ACWA Power International got more than $300bn of orders for a $1.2bn listing.

Europe Boost

Fertiglobe is an important part of Abu Dhabi’s efforts to export hydrogen, a fuel seen as crucial to the global transition away from coal and oil. It operates four fertilizer and chemical plants in the UAE, Egypt and Algeria.

Its earnings have boomed this year amid a commodities rally driven by the recovery of major economies from the coronavirus pandemic. In recent weeks, the company has been seen sales to Europe climb due to a gas crisis that’s forced some rivals there to cut production.

The company reported revenue of $1.55bn in 2020 and $1.26bn for the first six months of 2021. This month, it raised dividend guidance for the second half of the year to $200m from $150m.