Abu Dhabi National Oil Company said it successfully raised $1.64 billion through the sale of new shares and issuance of exchangeable bonds in its fuel retail arm, Adnoc Distribution.
The company said that following a successful book building process, the combined offering of 375 million shares and about $1.195 billion of exchangeable bonds was placed at a blended price of Dh4.82 per share, which is 5.7 per cent above its current three-month volume-weighted average and 1 per cent below yesterday's closing price of Dh4.85 per share.
The combined offering "was covered in less than one hour" and attracted significant demand from regional and international investors, Adnoc said.
"The success of this innovative and pioneering combined offering, the first of its kind in the GCC, once again highlights the attractive investment opportunities and environment provided by Adnoc and, more broadly, Abu Dhabi and the UAE," said Dr Sultan Al Jaber, the UAE's Minister of Industry and Advanced Technology, who is also Adnoc group chief executive and managing director.
"We were delighted to see exceptionally strong demand and a number of new world-class institutional investors participate in both the share offering and exchangeable bond offering, reinforcing the attractiveness of Adnoc Distribution and bringing new FDI into the UAE."
Adnoc Distribution is the UAE's biggest fuel retailer, with a total of 449 stations at the end of March and has ambitious plans to extend its network both in the UAE and Saudi Arabia.
Adnoc floated 10 per cent of the distribution business in 2017 and listed a further 10 per cent through an institutional placing in September last year. The 375 million shares offered equate to a stake of about 3 per cent in the company. The bond, which has a maturity date of 2024, is exchangeable at a price of Dh5.01 per share, under certain conditions. It is exchangeable for a further 7 per cent of the company's shares.
The deal has the potential to increase its free float to 30 per cent, assuming the bonds are exchanged. This will bring "greater liquidity to Adnoc Distribution shares" and broaden its investor base, Adnoc said.
Adnoc Distribution's shares were included into Morgan Stanley Capital International's (MSCI) Emerging Markets index from Thursday. It joins nine other UAE-listed companies that are part of the index, which is tracked by funds with billions of dollars worth of assets.
The company's shares fell 8.25 per cent on Wednesday to Dh4.45 per share, but remain about 19 per cent higher so far this year, giving it a market capitalisation of Dh55.37bn.
Adnoc Distribution reported a 58 per cent rise in first quarter profit this year of Dh631m.