Mubadala says it’s close to IPO of Emirates Global Aluminium

Abu Dhabi sovereign wealth fund Mubadala Investment Co. said it’s “close” to an initial public offering of Emirates Global Aluminium (EGA) as it studies other major deals including a role in a consortium investing in Saudi Aramco’s oil pipelines.

“We’ve been thinking about this for a couple of years and waiting for the right time for that business to be IPO’d,” chief executive officer Khaldoon Al Mubarak said on Monday when asked about a possible IPO of EGA, the Middle East’s biggest producer of aluminum.

Coming off its busiest year ever, the $232bn fund has shown little sign of slowing down in 2021, striking deals ranging from purchasing a Brazilian refinery to investing in convertible bonds of messaging app Telegram.

EGA, which is equally owned by Mubadala and Investment Corp. of Dubai, has smelters in Abu Dhabi and Dubai and a bauxite mine in Guinea.

The company had planned an IPO in 2018 or 2019 but it was pulled after then-US President Donald Trump imposed tariffs on aluminum imports from the United Arab Emirates. His successor Joe Biden said in February that he would keep the US restrictions in place, reversing Trump’s last-minute move to grant the UAE relief from the duties.

“We will decide, obviously, when the appropriate market conditions are there, but the company is certainly in a very strong position and I think is well placed for an IPO,” Al Mubarak said during a virtual conference. “We’re very close now.”

Mubadala is meanwhile considering other deals. It hasn’t yet decided whether to join a group led by EIG Global Energy Partners that agreed on a $12.4bn deal with Aramco.

The wealth fund has teams studying the opportunity and looking at possible returns on investing in neighbouring Saudi Arabia, according to Al Mubarak. It’s previously said that it was in talks with EIG.

According to an announcement last Friday, the investors will buy 49 per cent of Aramco Oil Pipelines Co., a recently-formed entity with rights to 25 years of tariff payments for crude shipped through the Saudi Arabian firm’s network. Aramco will own the rest of the shares and retain full ownership of the pipelines themselves.

Mubadala has also made no decision about a share sale of its wholly-owned chipmaker GlobalFoundries, according to Al Mubarak. Earlier this month, Bloomberg reported that the wealth fund had started preparations for a US IPO that could value the business at about $20bn.

“Today GlobalFoundries is a strong, well-run business,” Al Mubarak said. “We have not taken a view or a decision yet.”

After an initial pause after the pandemic first hit, the wealth fund doubled down and invested more in 2020 than in any previous year, the CEO said.

India emerged as one key destination for Mubadala’s money, with its investments there in 2020 eclipsing the combined total of the preceding 19 years, Al Mubarak said.

The wealth fund invested $1.2bn in Reliance Industries Ltd.’s digital upstart Jio Platforms Ltd. in 2020, a deal that gave Mubadala a 1.85 per cent stake in the venture.

“Clearly, we were underweight in terms of India” and “over the last many years we didn’t invest as much as we should,” the CEO said. “That’s changing, and as far as we’re concerned in Mubadala, we’re certainly giving it a very particular focus.”