Fertiglobe raises $795m in third-largest IPO on the ADX

The market value of the company upon listing is expected to be about $5.8bn

Fertiglobe is selling more than 1.145 billion shares representing 13.8 per cent of the company’s share capital. Courtesy: Adnoc
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Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, raised about $795 million in its initial public offering amid strong demand from international, regional and local investors.

The chemicals joint venture between Adnoc and OCI set the final price of its shares at a midpoint of Dh2.55 to provide "an attractive investment opportunity for new shareholders", it said in a statement on Wednesday.

Fertiglobe, which is also the Mena region’s largest producer of nitrogen fertilisers by production capacity, sold more than 1.145 billion shares representing 13.8 per cent of its share capital.

Total gross demand for the IPO amounted to over $17.4 billion, implying an oversubscription level of 22 times in aggregate and 32 times for the qualified investor tranche, excluding cornerstone investors.

The listing is the third-largest on the Abu Dhabi Securities Exchange, with Fertiglobe's market value at $5.8bn.

The company attracted three cornerstone investors with commitments of $231m. They include the Abu Dhabi Pension Fund, Singapore's sovereign wealth fund GIC and as San Francisco-based activist investor Inclusive Capital Partners.

The first tranche of the offering was set at 10 per cent and allocated to UAE retail investors while the remainder was reserved for qualified institutional investors.

The company will start trading on the ADX at 10am UAE time on October 27, 2021, subject to closing conditions. It will appear under the ticker “Fertiglobe” and the International Securities Identification Numbering (Isin) code “AEF000901015”.

Netherlands-listed OCI will continue to have the majority stake in Fertiglobe, with Adnoc holding on to 36.2 per cent of the share capital.

Fertiglobe plans to increase its dividend to $200m, from $150m, with the payout for the second half of the current financial year due in April 2022.

The company expects to distribute a dividend of at least $400m, an increase from $315m in the financial year ending December 2022.

Fertiglobe will pay half of the dividend amount in October 2022, with the remainder scheduled to be paid in April 2023.

Citigroup, First Abu Dhabi Bank, HSBC and Morgan Stanley acted as joint global co-ordinators of the IPO while EFG-Hermes, Goldman Sachs and International Securities were joint book-runners.

First Abu Dhabi Bank was the lead receiving bank and Al Maryah Community Bank acted as a receiving bank.

Updated: October 20, 2021, 9:07 AM