ADNOC Raises $769 Mln from Logistics & Services IPO

ADNOC Raises $769 Mln from Logistics & Services IPO
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ADNOC Raises $769 Mln from Logistics & Services IPO

ADNOC Raises $769 Mln from Logistics & Services IPO

Abu Dhabi National Oil Co. (ADNOC) achieved revenues worth 2.83 billion dirhams ($769 million) for launching an IPO of a minority stake that represents 19 percent in the Logistics & Services unit.

The share was increased from 15 percent to 19 percent at 2.01 dirhams each to meet the huge demand from investors.

The IPO saw exceptional demand and the book-building process generated orders of 460 billion dirhams (over $125 billion), implying an oversubscription level of 163 times, the highest-ever oversubscription level for a UAE bookbuild IPO.

Group Chief Financial Officer of ADNOC Khaled Al Zaabi said, “We are delighted with the unparalleled demand for ADNOC L&S shares from UAE retail investors as well as the local, regional, and global investor community.”

“This offering saw the largest demand globally for an IPO this year to date and achieved the highest-ever oversubscription for a UAE bookbuild IPO,” he added.

As the sixth company that ADNOC has listed on ADX in the past five years, ADNOC L&S follows the landmark IPOs of ADNOC Distribution, ADNOC Drilling, Fertiglobe, Borouge, and ADNOC Gas.

ADNOC IPOs to date have raised 29.38 billion dirhams (more than $8 billion), with total demand exceeding 1.41 trillion dirhams ($385 billion), supporting ADNOC’s ambitious growth strategy.

The company’s revenue and adjusted EBITDA for the year ended December 31, 2022 was 8.4 billion dirhams ($2.3 billion) and 2.2 billion dirhams ($599.3 million), respectively, with revenue having increased at a compound annual growth rate of more than 20 percent from 2017 to 2022.

ADNOC L&S is undergoing a major strategic expansion drive, underpinned by an up to 18.36 billion dirhams ($5 billion) medium-term capital expenditure program, providing investors with an exciting growth opportunity.

ADNOC L&S intends to pay a fixed dividend amount of 716 million dirhams ($195 million) for the second quarter and the second half of 2023 (equivalent to annualized dividends of $260m).

Thereafter, the company expects to increase the annual dividend per share by at least 5 percent per annum.

The expected date of listing on ADX is 1st June 2023.

ADNOC has offered six IPOs over the past five years. (Reuters)



Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.