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ADNOC Sells 3% of its Distribution Unit

Logos of ADNOC (Reuters)
Logos of ADNOC (Reuters)
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ADNOC Sells 3% of its Distribution Unit

Logos of ADNOC (Reuters)
Logos of ADNOC (Reuters)

Abu Dhabi National Oil Company announced the successful closing of its offering of approximately 375 million shares in ADNOC Distribution, approximately 3 percent of the registered share capital of ADNOC Distribution.

The securities referred to herein may not be offered or sold in the United States unless registered under the US Securities Act of 1933, as amended, or offered in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and in compliance with applicable United States state law.

It also issued approximately $1,195 billion of senior unsecured bonds due 2024 that are exchangeable into existing shares of ADNOC Distribution constituting approximately 7 percent of the registered share capital of ADNOC Distribution, under certain conditions.

“This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in the United Arab Emirates, the United States, Australia, Canada, Japan or Saudi Arabia, or in any jurisdiction in which such offer or solicitation is unlawful,” read the company’s statement.

The combined offering was placed at a blended price of AED 4.82 ($1.1) per share, which is 5.7 percent above the current 3-month volume-weighted average share price.

The Exchangeable Bonds, with a maturity date of 2024, are denominated in US dollars and bear a coupon of 0.70 percent, said the company.

The Exchangeable Bonds are issued at an issue price of 100 percent and will be exchangeable into existing shares of ADNOC Distribution at an exchange price of AED 5.01 ($1.37) under certain conditions.

Settlement of the Share Offering is expected to occur on or about May 31, and settlement of the Exchangeable Bond Offering is expected to occur on or about June 4.

UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC Sultan Ahmed al-Jaber said the success of this innovative and pioneering Combined Offering, the first of its kind in the GCC, highlights the attractive investment opportunities and environment provided by ADNOC, Abu Dhabi, and the UAE.

The "innovative deal structure" has the potential to increase the free float of ADNOC Distribution to 30 percent assuming the Exchangeable Bonds are exchanged and settled in shares, and ADNOC will retain at least a 70 percent strategic stake in the company as it continues to see significant growth potential in ADNOC Distribution, according to Jaber.

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Egypt Makes Progress in its Nuclear Energy Project

Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
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Egypt Makes Progress in its Nuclear Energy Project

Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)

Egypt has reported significant progress in the construction of the El-Dabaa nuclear power plant in the country’s northwest, a project being developed in cooperation with Russia. The government announced on Tuesday that more than 20% of the project has been completed.

Egypt and Russia signed a cooperation agreement on November 19, 2015, to establish the nuclear power station at a cost of $25 billion, funded through a Russian government loan. The final agreements for El-Dabaa were signed in December 2017.

The plant will consist of four nuclear reactors with a total generation capacity of 4,800 megawatts, each producing 1,200 megawatts. The first reactor is scheduled to begin operations in 2028, with the remaining units coming online gradually as part of Egypt’s energy mix.

In its quarterly performance report, the Egyptian government stated that the project aligns with efforts to expand the peaceful use of nuclear energy within the national power grid.

President Abdel Fattah al-Sisi emphasized in November the importance of executing energy projects efficiently and on schedule, calling them a pillar of Egypt’s development strategy. He underscored the need to adhere to the project timeline while ensuring the highest standards of execution and workforce training.

Also in November, Prime Minister Mostafa Madbouly reaffirmed Egypt’s commitment to the project, stating that El-Dabaa would enhance renewable energy capacity and stabilize the national power grid.

In early March, Russia’s Atomstroyexport announced that construction on the second reactor at El-Dabaa had progressed ahead of schedule. According to the Egyptian Nuclear Power Plants Authority, the second tier of the inner containment structure had been installed at the reactor building.

Egypt experienced widespread power outages last summer, which ended in late July after securing sufficient fuel supplies for its power plants.

The El-Dabaa project is part of Egypt’s strategy to diversify its energy sources, generate electricity to meet domestic demand, and reduce reliance on imported gas and other fuels.

On Tuesday, the government also announced an additional 200 megawatts of private-sector solar power capacity as part of its efforts to expand renewable energy. Officials said the move would support energy diversification and advance the country’s sustainable development strategy.