The government-owned crude producer plans to sell a stake of at least 10 percent Abu Dhabi National Oil Co (ADNOC). Abu Dhabi State Oil Producer will start an expected privatisation across Middle East oil industry. This includes state-owned Saudi oil gigant Aramco. It will be a big reverse in nearly three decades trend of nationalisation energy industry that started after the World War II. Like other oil giants, ADNOC wants to trim costs and boost efficiency with current oil prices.
„The IPO (Initial Public Offering) of Adnoc Distribution represents an important milestone in this new approach and is a natural evolution for the growth and expansion of this exciting retail-focused business,“ said Adnoc Chief Executive Officer Sultan Ahmed Al Jaber.
According to Bloomberg, the unit could achieve a total market value of about $4 billion to $5 billion. That would see the IPO raise as much as $500 million. ADNOC promised high-dividend policy for the next two years. The valuation of company could rise to $8 billion if investors price the stock at 5 percent dividend yield.
In a statement released in Monday, company said that the admission of shares on the Abu Dhabi Securities Exchange is expected in December. The IPO will be coordinated by Citigroup Inc., First Abu Dhabi Bank PJSC, HSBC Bank Plc and Merrill Lynch International. ADNOC group will continue to remain wholly owned by Abu Dhabi government, said Al Jaber. EFG-Hermes U.A.E. Ltd., Goldman Sachs Group Inc. and Morgan Stanley are acting as joint bookrunners for the offering.
ADNOC pumps most its oil in United Arab Emirates, which has 6 percent of global oil reserves. U. A. E. oil producer is 12th largest in the world with production of approximately 3 million barrels per day.