Adnoc Drilling IPO set to raise up to $751m after pricing
13 September, 2021
The drilling subsidiary of Abu Dhabi National Oil Company expects to raise approximately Dh2.76 billion ($751 million) from the planned listing of 7.5 per cent of its shares.
Adnoc Drilling's shares have been priced at Dh2.30 each, implying an equity value of $10 billion, the energy company said in a statement on Monday.
The subscription period for the offer opens today, September 13, and will close on September 23 for UAE retail investors and on September 26 for qualified domestic and international institutional investors.
Adnoc Drilling shares are expected to start trading on the Abu Dhabi Securities Exchange on October 3.
The selling shareholder, Adnoc, and its drilling subsidiary have seen "strong initial demand indications from both local and international investors, ahead of the start of the subscription period", the companies said.
The offer price per share provides investors with "a highly attractive value proposition" and is also reflective of Adnoc's "prioritisation of a supportive aftermarket performance post-listing", the statement added.
Adnoc announced the intention to float shares in its drilling company on the ADX last week.
US energy services company Baker Hughes, which has a 5 per cent stake in Adnoc Drilling, will retain its shares. Adnoc will remain the majority shareholder following the initial public offering.
The share offer is available to individual and other investors, Adnoc Group employees and retirees of the national oil company as part of the retail offering, as well as to qualified international investors. Five per cent of the offer is reserved for the Emirates Investment Authority.
Adnoc Drilling is one of the largest drilling companies in the Middle East, operating 107 onshore, offshore and island rigs, of which 11 are rented. The company, which began operations in 1972, has expanded its fleet of rigs, adding 67 since 2010, in line with the growth in oil and gas production capacity at Adnoc.
This is the second IPO for the Adnoc Group, which listed 10 per cent of the company's distribution business in 2017. Adnoc doubled the amount of its free-floating stock to 20 per cent in September last year following a block placement of 1.25 billion shares, valued at $1 billion, with institutional investors.
The listing of 7.5 per cent of Adnoc Drilling's shares will raise the free float market cap of the ADX by $750m and add $10bn to the market cap, equivalent to 2.6 per cent of the total market cap of ADX, according to Jaap Meijer, managing director, head of equity research at Arqaam Capital.
The Abu Dhabi stock exchange has experienced record trading performance, helping to boost its market capitalisation beyond Dh1 trillion ($272bn).
This is the second major listing this year in Abu Dhabi.
In July, Al Yah Satellite Communications (Yahsat), a unit of Mubadala Investment Company, raised Dh2.68bn ($730m) through a public offering.
The company sold 975.9 million, or 40 per cent, of its shares through the IPO.
Source: www.thenationalnews.com
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