Abu Dhabi National Oil Company said it had completed an institutional placement of 1.25 billion shares worth $1 billion (Dh3.67bn) in its distribution unit to a group of institutional investors.
The transaction is the “largest block placement of a publicly-listed GCC company,” Adnoc said in a statement on Monday.
The placement follows the listing of 10 per cent of Adnoc Distribution’s shares on the Abu Dhabi Securities Exchange in December 2017.
The placement was priced at Dh2.95 per share (80 cent), which is 18 per cent above the initial public offering price of Dh2.50 and equivalent to a 5 per cent discount on the company’s three-month volume weighted average price.
Adnoc Distribution is the UAE’s largest fuel and convenience retailer. The company operates 406 fuel stations in the UAE and two in Saudi Arabia as of June 30. The institutional placement of the distribution entity’s shares follows Adnoc’s earlier intention to sell more of its shareholding in the company in order to increase the stock’s free float and liquidity on the ADX.
The transaction highlights "the attractive nature of Adnoc Distribution to investors and demonstrates the high quality investment opportunities offered by Adnoc and more broadly by Abu Dhabi and the United Arab Emirates," said Dr Sultan Al Jaber, Adnoc Group chief executive.
"For the investors, it presented a unique opportunity to access a sizeable stake in Adnoc Distribution and invest in a stable and highly compelling equity story, with an attractive and resilient dividend policy," Dr Al Jaber, who is also Minister of Industry and Advanced Technology, said.
"It also contributes to increased liquidity in the trading of shares in Adnoc Distribution, while broadening our shareholder base.”
In the latest transaction, the company completed the placement of shares to a group of unspecified institutional investors. The shares are listed and traded on the local exchange and will increase the company’s free float to 20 per cent.
Adnoc will retain 80 per cent ownership of the distribution unit’s registered share capital following the placement. The placement was launched due to significant investor demand for Adnoc Distribution’s stock, the company said.
Adnoc Distribution's 2020 dividend is set to rise 7.5 per cent in 2020 to Dh2.57bn, after a 62 per cent increase in last year's dividend to Dh2.39bn. The company expects to pay the first six-month dividend of 2020, 10.285 fils per share, in October of this year, subject to board approval.
Citigroup Global Markets and First Abu Dhabi Bank acted as joint book runners for the placement. Moelis & Company was an independent financial adviser to Adnoc on the transaction.