Abu Dhabi National Oil Co. plans to sell as much as 20 percent of its fuel-distribution unit weeks after Saudi Arabia’s corruption crackdown deterred investors from the Middle East’s biggest share sale of the year.
The crude producer will offer 1.25 billion to 2.5 billion shares of Abu Dhabi National Oil Co. for Distribution PJSC, according to an advertisement on Monday. The pricing range for the book-build initial public offering will be announced on Nov. 26 and the shares will start trading in Abu Dhabi on Dec. 13.
The IPO is among several expected in the Middle East, including that of Saudi Aramco, as oil-rich Gulf governments sell assets to raise cash to diversify after crude prices slumped. The Adnoc sale is set to come after Emaar Properties PJSC scrambled to complete a $1.3 billion offering last week as local investors reneged on investment plans following the Saudi crackdown, according to people familiar with the matter.
“We should see very good demand for this IPO, as the company is closely correlated to the energy industry and you don’t have the chance of buying such a share in the region that easily,” said Issam Kassabieh, equities analyst at Menacorp Financial Services in Dubai. “It is a good play and different than Emaar Development, from the real estate market, that has several names traded already.’’
Valuation
Adnoc may seek a valuation of $10 billion to $14 billion for the unit, people familiar with the matter said in July. The unit posted earnings before interest, tax, depreciation and amortization of 2.1 billion dirhams ($573 million) last year.
Adnoc will try to sell stakes in some units and seek partners for others, Chief Executive Officer Sultan Al Jaber said in an interview last week. The company, which raised $3 billion in bonds last month, is putting chunks of separate operating units up for sale instead of selling a piece of the parent company, as Saud Arabia is planning with Aramco.
“We are looking for ways to maximize value to our shareholders while keeping Adnoc wholly-owned by the Abu Dhabi government,” Al Jaber said. Adnoc could seek a cornerstone investor for the IPO, he said.
Adnoc pumps most of the crude in the U.A.E., a member of the Organization of Petroleum Exporting Countries with about 6 percent of global reserves. The company allows foreign firms to join in partnerships that give them a stake in the emirate’s oil.
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