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ADNOC Successfully Completes $1b Institutional Placement of Distribution Shares

ADNOC Successfully Completes $1b Institutional Placement of Distribution Shares
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ADNOC Successfully Completes $1b Institutional Placement of Distribution Shares

ADNOC Successfully Completes $1b Institutional Placement of Distribution Shares

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.

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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.