Abu Dhabi National Energy Company, also known as Taqa, is exploring the possibility of a dual listing on the London Stock Exchange as a potential option to improve the liquidity of its shares and open up to foreign investors.
The move, complementing its current listing on the Abu Dhabi Securities Exchange, would be similar to that undertaken by DP World in 2011, according to two people familiar with the matter.
In a statement, Taqa confirmed it was "exploring opportunities to enhance the liquidity of its shares traded on the ADX but has not taken any decisions in this regard".
Talk of a capital raise on the UK's biggest stock exchange comes as growing numbers of UAE energy companies look in the direction of overseas stock markets.
The Sharjah-based producer Dana Gas is studying options to improve the value of its shares, also listed on the ADX, with options including revisiting plans for a London listing, Majid Jafar, a board member and the chief executive of the parent company, Crescent Petroleum, said this month.
Meanwhile RAK Petroleum, which merged with Norway's DNO in 2011, said last week that it plans to restructure the company and spin off its stake in DNO through a holding company to be listed on a "major European or North American stock exchange".
However, the absence of sufficiently robust back-office systems on the ADX to manage dual listings was the biggest obstacle towards such a development taking place, according to bankers familiar with the matter.
DP World's share sale came alongside an existing listing on Nasdaq Dubai, where shares are denominated in dollars.
Only UAE nationals can own Taqa's stock at present. Taqa owns majority stakes in all of the UAE's power stations outside of Dubai.
The shares have struggled amid poor liquidity since 2009, with average daily traded volumes below 1 million shares.
Taqa's shares have fallen 4.4 per cent to Dh1.30 each since the start of the year, underperforming gains of 35.4 per cent for the wider ADX General Index during the same period, one of the biggest index gains worldwide.
Initial public offerings are yet to return to local markets, with most opting for overseas listings instead.
NMC Health was the last company from Abu Dhabi to secure funding from a share listing, raising £117 million (Dh651.8m) from the LSE last year. No initial public offerings have taken place on the ADX since 2011.
The other advantage of a London listing would be to gain coverage from London's large pool of oil and gas analysts, who may be encouraged to take a closer look at other companies in the region.
"It just gets analysts writing about stuff," said one investment banker, who asked not to be identified. "Then they want to do comparisons."
However, the numbers of Arabian Gulf companies seeking to head to markets for initial public offerings were "swelling" — and looking at London with interest — said Andrew Tarbuck, a capital markets partner at the law firm Latham and Watkins.
"We are seeing an increasing number of Gulf issuers looking at London as a primary listing venue, with a dual listing on their local exchange," he said.
The main impediment is the foreign ownership limits, which ensure that no more than half of a company's share capital is held by international investors, Mr Tarbuck added.
For the time being, Taqa's strategy has focused on reaching an "investment grade" credit rating on a stand-alone basis. At present, its credit rating is boosted above the threshold by its 51 per cent ownership by the Abu Dhabi Government via the Abu Dhabi Electricity and Water Authority.
"Getting more equity funding per se is less of a consideration for us than whether they can raise debt for refinancing," said Karim Nassif, an analyst at Standard & Poor's. "It would be supportive of our view of the adequate liquidity if they were to widen their access to debt funding."
