UAE aims to raise $3 billion from new ADNOC Gas share offering

UAE aims to raise $3 billion from new ADNOC Gas share offering

The UAE aims to raise more than $3 billion from a new ADNOC Gas share offering for trading on the stock exchange, as part of Abu Dhabi National Oil Company (ADNOC)’s efforts to enhance liquidity and diversify its shareholder base.

Abu Dhabi National Oil Company (ADNOC), the current majority shareholder with a 90% stake in ADNOC Gas Limited’s common shares, which are traded on the Abu Dhabi Securities Exchange, announced its intention to offer approximately 3.1 billion ADNOC Gas shares through a marketed offering.

The UAE oil giant revealed that ADNOC Gas’s new offering will amount to 3 billion, 70 million, 56 thousand, and 880 shares, representing 4% of ADNOC Gas’s capital. The offering, which ends on February 21, 2025, is expected to raise approximately AED 11.058 billion ($3.01 billion), according to the closing price of ADNOC Gas shares on Wednesday at AED 3.58 ($0.97).

ADNOC Gas Offering

“Since the initial public offering of ADNOC Gas in March 2023, the gas company has achieved exceptional growth, strong financial performance and attractive returns for shareholders,” said Khalid Al Zaabi, Chief Financial Officer at ADNOC Group.

He added: “As a world-class integrated gas processing company, ADNOC Gas is well positioned to achieve further expansion, as the company continues to meet the majority of the local market’s gas needs, while executing its ambitious growth strategy.”

He pointed out that the new ADNOC Gas offering is in line with ADNOC Group’s strategic objectives to enhance the liquidity and free trading of ADNOC Gas shares, further diversify its shareholder base, and provide a path to expand its inclusion in financial market indices through this secondary offering.

ADNOC and ADNOC Gas will be subject to a normal trading lock-up period of approximately 180 days, subject to customary exceptions, unless waived by the Joint Global Coordinators.

ADNOC Gas Offering Details

The new ADNOC Gas offering comprises a 4% stake in the issued and traded share capital of the company and will be open to qualified institutional investors and other investors in a number of countries including the United Arab Emirates.

The offering will only be open to professional investors as defined by the Emirates Securities and Commodities Authority and will not be open to the public in the UAE or any other jurisdiction. The offering will consist of shares held by ADNOC, which prior to the offering amounted to approximately 90% of the share capital of ADNOC Gas.

The final number of shares to be offered and the ADNOC Gas offering price will be determined upon completion of the book-building process, in accordance with the Abu Dhabi Securities Exchange’s (ADX) Block Dealings Rules.

The final terms of the offering are expected to be announced after the completion of the book building process, and the net proceeds from the offering will be received by ADNOC, which will bear all the expenses of the offering.

Accordingly, ADNOC Gas will not receive any proceeds from the offering, and the offering will not result in any dilution of the Company’s shares or shares held by other shareholders in the The inclusion of ADNOC Gas in these two indices will contribute to the diversification of its investor base significantly and highlight its Company.distinctive value to the international investment community.

The ADNOC Gas offering aims to enhance the liquidity and trading of the Company’s ordinary shares and diversify its shareholder base, as the availability of a larger number of free float shares is expected to provide a path towards inclusion in the MSCI Emerging Markets Index and the FTSE 100 Index, which are expected to be implemented during the next quarterly review, subject to the Company meeting the relevant inclusion criteria.

ADNOC Gas Earnings

ADNOC Gas continued to deliver steady growth and profitability according to the company’s financial results for the fiscal year 2024, achieving an adjusted net income of AED 18.4 billion ($5 billion), the highest level since the company’s initial public offering, with net profit of AED 5.1 billion ($1.38 billion) in the fourth quarter of 2024, exceeding Bloomberg estimates for both periods.

The company’s strong financial results reflect the robust execution of its updated strategy announced in November 2024, which outlines ADNOC Gas’s updated growth plan, including the cost of acquiring ADNOC’s stake in the Ruwais LNG project, and its progress towards its target to increase EBITDA to more than 40% by 2029.

The growth is underpinned by ADNOC Gas’s strong balance sheet and ability to generate free cash flow, which supports a robust dividend policy that includes an expected 5% increase in dividends per share per annum over the coming years. The ADNOC Gas offering supports ADNOC’s commitment to contributing to the growth of the Abu Dhabi Securities Exchange, while creating sustainable value for shareholders across its listed companies.

The ADNOC Gas offering is expected to close promptly on 21 February 2025, subject to acceleration at ADNOC’s discretion. Bank of America Securities, Citi, EFG Hermes, First Abu Dhabi Bank, HSBC and International Securities acted as joint global coordinators and bookrunners for the offering.