Abu Dhabi is currently ramping up efforts for the next big IPO, this time from Borouge, an ADNOC subsidiary.
Borouge runs a petrochemical facility in Abu Dhabi and is one of the UAE’s economic powerhouses. The IPO will sell over 3 billion shares, giving the stock market another heavyweight in Abu Dhabi. This stake sale represents 10% of the outstanding share capital of Borouge.
Borouge – or Abu Dhabi Polymers Co. (ADP) – is a joint venture between ADNOC and Borealis that will follow AD Ports Group’s recent IPO. The retail portion of the offering will take place from May 23 to 28, while the qualified investor portion will take place from May 23 to 30.
Borouge will pay dividends twice a year, as is becoming more customary with freshly listed companies, the first in September for $325 million and the second in March for $650 million, as per 2022 projections. However, in 2023, the business plans to pay a staggering $1.3 billion in dividends.
ADP expects to issue a $250 million dividend to current shareholders before the transaction closes.
ADNOC and Borealis, the current shareholders,’ retain the right’ to change the amount of the offering at any moment before pricing it. Given the likelihood of interest from strategic investors, experts believe this option might be pursued.
“Thru Borouge and our recently announced 25% equity investment in Borealis, ADNOC is well-positioned to benefit from the significant industrial and consumer-driven growth in the petrochemicals sector in the coming decades,” said Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC’s Managing Director and Group CEO. “In order to promote sustainable growth for Abu Dhabi and the UAE, ADNOC continues to unlock and optimize value throughout its integrated upstream and downstream asset base.”
Borealis, an ADNOC partner in Borouge, is the world’s seventh biggest manufacturer of polyethene and polypropylene with headquarters in Vienna.
ADNOC’s Sales Pitch:
ADNOC’s go-to-market strategy with its subsidiaries or major ventures continues with this IPO from Borouge. There was ADNOC Drilling, which had one of the most successful public floats in the UAE, and Fertiglobe, which is a joint venture, in the recent past. ADNOC Distribution is another entity that may be found on ADX.
“ADNOC is introducing to the market a UAE-based, internationally competitive market leader,” Al Jaber continued. “This world-class company offers cutting-edge manufacturing, consumer and infrastructural solutions, as well as cutting-edge technology. All UAE citizens and residents, as well as eligible foreign and local institutional investors, will be able to participate in this newest offering.”