Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, and the Middle East and North Africa’s largest producer of nitrogen fertilisers by production capacity, plans to list on the Abu Dhabi Securities Exchange, selling 13.8 per cent of the company’s share capital.
The IPO is open to individuals and other investors in the UAE as part of a retail offering and to qualified institutional and other investors as part of the qualified investor offering, the joint venture between OCI and Abu Dhabi National Oil Company, said in a statement on Tuesday.
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. The export-focused nitrogen fertiliser business 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.
The share price of the offering will be determined once the book-building process is complete. Adnoc and OCI reserve the right to amend the size of the offering at any time before pricing. 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 following the offering.
Fertiglobe’s ADX listing will be the first of a free zone company onshore in the UAE and strategically positions the company to capitalise on new demand for low-carbon ammonia, 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.
“Fertiglobe offers a unique investment opportunity to access an increasingly critical global sector, while also benefiting from emerging opportunities in the low-carbon ammonia value chain and the hydrogen economy,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc. “Adnoc, like OCI, will remain a long-term and committed major shareholder in Fertiglobe and will continue to partner with the company on emerging opportunities, including the development of a new state-of-the-art blue ammonia project at Ta’ziz in Ruwais, Abu Dhabi.”
Ta’ziz Industrial Chemicals Zone within Ruwais, is being developed by Adnoc and holding company ADQ to manufacture downstream products. This year, Adnoc announced the development of the blue ammonia project to advance the UAE’s hydrogen economy.
Blue ammonia is a more easily transportable fuel source made from blue hydrogen, a byproduct of carbon dioxide that has been captured and stored. The blue aspect refers to hydrogen derived from natural gas feedstocks. The plant will have a production capacity of 1,000 kilotonnes a year.
“We are pleased to be announcing Fertiglobe’s intention ... Fertiglobe is increasingly becoming the ideal platform to capture the opportunities offered by the emerging yet rapidly growing hydrogen economy and generate strong cash flows,” said Mr Sawiris, executive chairman of OCI and executive vice chairman of Fertiglobe.
“As a pure play nitrogen company and an early mover in clean ammonia, it enhances the visibility of Fertiglobe in the marketplace including its financial performance attributes that support a robust dividend capacity, commercial positioning, and unlocking of various strategic avenues of growth.”
The fertiliser joint venture was formed following Adnoc’s plans in 2019 to invest Dh165 billion in developing its downstream business over the following five years. The move came amid a growing pivot towards building a stronger product portfolio among Middle East oil exporters.
Adnoc has been looking for ways to monetise some of its non-core assets as it looks to diversify income streams and bring in foreign capital to develop its business.
Last year, Adnoc attracted a consortium of the world's leading infrastructure and sovereign wealth funds to its gas pipelines. The $20.7bn deal was the largest such transaction in the energy space in 2020. This followed on from a 2019 deal to sell a stake in its oil pipelines.
“Fertiglobe is an early mover in production of blue and green ammonia, which results in low or no carbon emissions and has a myriad of uses as hydrogen carrier and clean fuel,” said Ahmed El Hoshy, OCI and Fertiglobe chief executive.
“Ammonia is for instance emerging as clean alternative to heavy fuel oil used in the hard-to-decarbonise shipping sector, where Fertiglobe is particularly well-positioned given its locations on global trade routes.
“Not only does the IPO offer access to an increasingly critical global sector that ensures global food security, it is also supporting the global energy transition.”
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 31 times oversubscribed.
Fertiglobe’s forthcoming IPO exemplifies “Adnoc’s pivotal role in driving the growth and diversification of the nation’s economy, supporting the further development of the UAE’s private sector and equity capital markets, and attracting foreign direct investment into Abu Dhabi and the UAE, fully aligned with the recently announced UAE ‘Principles of the 50’”, Dr Sultan said.