Fertiglobe, the joint venture between Abu Dhabi National Oil Company and Dutch fertiliser company OCI, may raise as much as $827 million in an initial public offering after the company priced its shares on Wednesday.
The company is selling more than 1.145 billion shares representing 13.8 per cent of the company’s share capital. The shares have a price range between Dh2.45 and Dh2.65, implying an equity valuation of $5.5 billion to $6bn. Based on the minimum price range the company would raise at least $765m from the listing.
Fertiglobe is the world’s largest seaborne exporter of urea and ammonia and is the region's largest producer of nitrogen fertilisers by production capacity.
The subscription period for the IPO commences today and will close on October 18 for retail in the UAE. The second tranche, which is open to qualified institutional investors, will close on October 19.
"This IPO represents a milestone moment for Adnoc and Fertiglobe, as well as for the growing depth and development of the UAE’s equity capital markets," said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, Adnoc managing director and group chief executive, and Fertiglobe chairman.
"Fertiglobe is ideally positioned to play a leading role in a critical global industry while accessing new opportunities in the rapidly emerging hydrogen economy," he said.
The company has also attracted three cornerstone investors with commitments of $231m. They include the Abu Dhabi Pension Fund, Singapore's sovereign wealth fund GIC as well as San Francisco-based activist investor Inclusive Capital Partners.
Fertiglobe also plans to increase its dividend to $200m from $150m, with the pay-out for the second half of the current financial year due in April 2022.
The company expects to distribute a dividend of at least $400m, which is an increase from $315m for the financial year ending December 2022. Fertiglobe will pay half of the dividend amount in October 2022, with the remainder to be paid in April 2023.
It also appointed Jeffrey Ubben, who is the founder and managing partner of Inclusive Capital Partners, to its board as an independent director.
Adnoc holds a 42 per cent stake in Fertiglobe, with OCI retaining the majority 58 per cent interest. OCI is listed on the Euronext Amsterdam exchange and has Egyptian billionaire Nassef Sawiris as its biggest shareholder. Fertiglobe was formed in 2019 following the merger of Adnoc’s fertiliser arm and OCI’s Middle East nitrogen fertiliser business. Fertiglobe's headquarters is at the Abu Dhabi Global Market.
OCI is expected to indirectly continue to own a majority of Fertiglobe’s share capital post-IPO, while Adnoc is expected to indirectly own at least 36.2 per cent of Fertiglobe’s share capital after the offering.
"Our complementary partnership with Adnoc has grown from strength to strength, and Fertiglobe’s listing on the ADX, a pre-eminent financial hub in the region, will bolster visibility in the global markets," Mr Sawiris said.
Fertiglobe’s ADX listing will be the first of a free zone company onshore in the UAE. It strategically positions the company to capitalise on new demand for low-carbon ammonia. The chemical is an integral part of the clean hydrogen economy, in which blue and green ammonia serve as an efficient energy carrier and as a clean fuel. The listing will also allow the company to leverage strengths and global reach from both shareholders.
Citigroup, First Abu Dhabi Bank, HSBC and Morgan Stanley have been appointed as joint global co-ordinators on the IPO. EFG-Hermes, Goldman Sachs and International Securities have been appointed as joint bookrunners. First Abu Dhabi Bank is the lead receiving bank and Al Maryah Community Bank has been appointed as a receiving bank.
The launch of Fertiglobe’s offering follows Adnoc Drilling’s IPO in September, in which the company raised more than $1.1bn from an 11 per cent sale, with the offering more than 31 times oversubscribed.