Borouge to raise $2bn in Abu Dhabi's biggest initial public offering

Petrochemicals producer sets price of public float at Dh2.45 a share, implying an equity value of $20bn

Borouge's new production unit in Ruwais. The company's IPO subscription period starts on Monday and runs until Saturday for UAE retail investors. Photo: Adnoc

Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, will raise $2 billion from its initial public offering, set to be the biggest listing yet on the Abu Dhabi Securities Exchange.

Borouge has set the price per share for its 10 per cent float at Dh2.45, implying an equity value of about $20bn for the company, which is selling about three billion shares to the public, it said on Monday.

The IPO subscription period starts on Monday and runs until Saturday for UAE retail investors. It will end next Monday for qualified institutional investors.

Borouge shares are expected to start trading on the Abu Dhabi Securities Exchange on June 3.

“The selling shareholders [retain] the right to increase the size of the offering at any time before the end of the subscription period, subject to applicable laws and the approval of the UAE Securities and Commodities Authority,” Borouge said.

Borouge is the fourth Adnoc subsidiary that has sought a listing on the second-biggest Arab stock market. Adnoc will own 54 per cent of the company after the listing while Borealis will control 36 per cent.

The company has secured a total commitment of about $570 million from seven strategic investors to anchor the public offering, Borouge said.

“The selling shareholders and the company entered into cornerstone investment agreements with entities ultimately controlled by International Holding Company, Multiply Group and Alpha Dhabi Holding, who have committed to subscribe for shares in the offering,” it said.

IHC has committed to a $50 million investment while Multiply and Alpha will invest $50m and $100m, respectively.

Abu Dhabi holding company ADQ is anchoring the deal with $120m while the Abu Dhabi Pension Fund has committed $100m. Emirates Investment Authority is investing $75m while India's billionaire Adani family has committed $75m.

“All of the foregoing investors have committed to purchase shares at the offer price, with all shares subject to a minimum six-month lock-up arrangement following listing,” Borouge said.

Some of the biggest listings in UAE since 2021 — in pictures

Abu Dhabi Ports - $1.1 billion IPO in February 2022: AD Ports Group raised $1.1bn from its share sale to help expand its operations globally and boost growth. ADQ, one of the region’s largest holding companies, remains a majority shareholder in AD Ports Group with a 75.44 per cent stake in the listed entity. Reuters

Dewa became the first public entity to list on the Dubai Financial Market, raising Dh22.41bn in an oversubscribed share sale. The IPO of the Dubai utility in April was the largest in Europe and the Middle East since Saudi Aramco’s debut in 2019. It has a market value of about $39bn and is the largest on the exchange. AFP

Yahsat – $730.6 million in July 2021: a unit of Mubadala Investment Company, it raised about $731m from its initial public offering last July. It sold 975.9 million shares, or 40 per cent of equity, through the IPO, which was several times oversubscribed, with significant demand from both qualified institutional and retail investors in the UAE. Photo: Mubadala Investment Company

Adnoc Drilling - $1.1 billion IPO in October 2021: Adnoc Drilling’s share sale, oversubscribed more than 31 times, was the largest listing on the ADX, raising more than $1.1 billion. Adnoc maintains its majority 84 per cent stake in the company while US energy services company Baker Hughes, which entered into a strategic partnership with Adnoc Drilling in October 2018, has a 5 per cent stake, and US contract oil and gas driller Helmerich & Payne holds 1 per cent. Photo: Adnoc

Fertiglobe- $795 million in October 2021: a joint venture between Adnoc and Netherlands-listed OCI, raised about $795m in its initial IPO last year, amid strong demand from international, regional and local investors. The company — 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. Photo: Fertiglobe

After the offering, Borouge expects to pay fixed dividends for the 2022 financial year worth $325m in September and $650m in March next year.

For 2023, the company aims to pay a dividend of no less than $1.3bn, it said earlier this month when it announced the intention to float its shares.

Its ability to pay dividends is dependent on a number of factors, such as the “availability of distributable reserves, the capital expenditure plans and market conditions”, the company said.

“Following the highly successful listings of Adnoc Distribution, Adnoc Drilling and Fertiglobe, Adnoc is bringing to the market a UAE-based, globally competitive market leader,” Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and managing director and group chief executive of Adnoc, said on May 18.

“This world-class business provides cutting-edge manufacturing, consumer and infrastructure solutions and offers innovative technologies.”

The listing of Borouge on the ADX, which has a market capitalisation of about Dh1.95 trillion, is the latest in a string of IPOs on the bourse.

Shares of Abu Dhabi Ports Group, the operator of industrial cities and free zones in the emirate, began trading on the ADX in February.

All of the foregoing investors have committed to purchase shares at the offer price, with all shares subject to a minimum six-month lock-up arrangement following listing

Borouge

In October, Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, raised about $795m from its listing on the ADX.

Adnoc Drilling, which reaped $1.1bn from its listing in the same month, is currently the biggest listing on the bourse.

In July, Al Yah Satellite Communications, better known as Yahsat, a unit of Mubadala Investment Company, raised about $730m through its listing.

Established in 1998, Borouge is a petrochemical company that employs more than 3,100 people and serves customers in more than 50 countries across Asia, the Middle East and Africa.

It provides polyolefin solutions for the agricultural, infrastructure, energy, advanced packaging, mobility and healthcare industries.

Its portfolio of products includes polythene and polypropylene — the two most common forms of polymer — which are used in a variety of products such as pipes, fittings, wires and cables, and also have automotive, sustainable packaging, agricultural and medical applications.