Adnoc Logistics & Services, an Adnoc subsidiary, is set to raise about $769 million from the sale of a 19 per cent stake in an Abu Dhabi Securities Exchange listing that has been heavily oversubscribed.
The company set the final price of its initial public offering at the top end of the range, at Dh2.01 a share, valuing the company at $4.05 billion.
It had earlier set the price range of its IPO between Dh1.99 and Dh2.01 a share.
Earlier this week, the company increased the number of shares allocated to retail investors in its initial public offering due to “significant” demand.
The retail portion of the IPO was raised to more than 1.4 billion shares, from 1.1 billion, equal to 19 per cent of the total shares on offer and up from the previously announced 15 per cent.
The offering was significantly oversubscribed by local, regional and international investors, with total gross demand amounting to more than $125 billion, implying an oversubscription level of 163 times on average, “the highest-ever oversubscription level for a UAE book-build IPO”, Adnoc said.
The listing is the sixth the global energy company “has successfully brought to market within five years and marks the next remarkable achievement in our ongoing value creation programme”, said Adnoc group chief financial officer Khaled Al Zaabi.
The company will start trading on the Abu Dhabi Securities Exchange on June 1 under the ticker symbol “ADNOCLS”, with an international securities identification number of AEE01268A239.
Adnoc will continue to own an 81 per cent stake in the company.
Al Seer Marine Supplies and Equipment, the National Marine Dredging Company, Alpha Oryx (ultimately owned by the Abu Dhabi Development Holding Company) and the Abu Dhabi Pension Fund have – directly or indirectly – committed to become cornerstone investors in the IPO, with a combined commitment of about $180 million.
“Adnoc L&S is a highly attractive value proposition, underpinned by strong and long-term growth credentials and a progressive dividend payout,” Mr Al Zaabi said.
Earlier this month, the company announced plans to pay dividends twice each financial year.
The Adnoc L&S IPO comes amid a flurry of listings in the Gulf region and Dubai, which plans to bolster the size of its capital markets.
Middle East IPOs raised more than $23 billion in 2022, compared with $7.52 billion from 20 offerings in the previous year.
That was the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest.
Abu Dhabi accounted for 14 per cent of all listings worldwide in the first quarter of 2023, an indication of the strength of its capital markets amid a challenging global IPO market, consultancy EY said in the latest edition of its Global IPO Trends report in March.
The UAE capital attracted $3 billion worth of listing proceeds in the three months ended March, placing it third worldwide.
Citigroup, First Abu Dhabi Bank, HSBC and JP Morgan were joint global co-ordinators on the Adnoc L&S IPO.
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Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
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Results:
6.30pm: Handicap (Turf) | US$175,000 2,410m | Winner: Bin Battuta, Christophe Soumillon (jockey), Saeed bin Suroor (trainer)
7.05pm: UAE 1000 Guineas Trial Conditions (Dirt) | $100,000 | 1,400m | Winner: Al Hayette, Fabrice Veron, Ismail Mohammed
7.40pm: Handicap (T) | $145,000 | 1,000m | Winner: Faatinah, Jim Crowley, David Hayes
8.15pm: Dubawi Stakes Group 3 (D) | $200,000 | 1,200m | Winner: Raven’s Corner, Richard Mullen, Satish Seemar
8.50pm: Singspiel Stakes Group 3 (T) | $200,000 | 1,800m | Winner: Dream Castle, Christophe Soumillon, Saeed bin Suroor
9.25pm: Handicap (T) | $175,000 | 1,400m | Winner: Another Batt, Connor Beasley, George Scott
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
RESULTS
Dubai Kahayla Classic – Group 1 (PA) $750,000 (Dirt) 2,000m
Winner: Deryan, Ioritz Mendizabal (jockey), Didier Guillemin (trainer).
Godolphin Mile – Group 2 (TB) $750,000 (D) 1,600m
Winner: Secret Ambition, Tadhg O’Shea, Satish Seemar
Dubai Gold Cup – Group 2 (TB) $750,000 (Turf) 3,200m
Winner: Subjectivist, Joe Fanning, Mark Johnston
Al Quoz Sprint – Group 1 (TB) $1million (T) 1,200m
Winner: Extravagant Kid, Ryan Moore, Brendan Walsh
UAE Derby – Group 2 (TB) $750,000 (D) 1,900m
Winner: Rebel’s Romance, William Buick, Charlie Appleby
Dubai Golden Shaheen – Group 1 (TB) $1.5million (D) 1,200m
Winner: Zenden, Antonio Fresu, Carlos David
Dubai Turf – Group 1 (TB) $4million (T) 1,800m
Winner: Lord North, Frankie Dettori, John Gosden
Dubai Sheema Classic – Group 1 (TB) $5million (T) 2,410m
Winner: Mishriff, John Egan, John Gosden
