UAE's ADNOC raises USD 2.5 billion

ADNOC has raised about Dh9.1 billion ($2.5 billion) by selling five per cent of its natural gas business to retail and institutional investors, marking the largest initial public offering (IPO) of the year to date in the Middle East. The offering is backed by a broad portfolio of international and regional investors.

This IPO was a great success for the company. The high demand means that the company received a large amount of money to fund its expansion. This also helps to build a solid investor base for the future. The IPO has also provided the company with increased visibility in the stock market and an opportunity to build its presence in the sector.

The objective of the IPO is to raise funds for the development of the company and the expansion of its brand in global markets. The fund raised will be used primarily to finance the acquisition of new technologies and improve the company's services. This will help the company achieve higher levels of competitiveness and take better advantage of future growth opportunities. 

The participation of ADQ, IHC Capital Holding, Alpha Wave Ventures II and OneIM Fund I LP in the IPO will enable the company to gain greater exposure and a stronger presence in the global financial markets.

Investors will also be supported by the Emirates Investment Authority's commitment to provide a $400 million stabilisation fund to ensure share prices remain stable during trading. This will help reduce risk for investors and allow the company to obtain a fair price for its shares.

ADNOC Gas' initial public offering (IPO) was a resounding success, with investor demand more than 50 times the number of shares available. The share price was set at Dh2.37, near the top end of the price range. The total value of the IPO was $124bn, making it the second largest equity placement in history, after ARAMCO's 2019 IPO. It is the largest IPO in Abu Dhabi's history. 

ADNOC Gas plans to pay dividends totalling $3.25bn in 2023, as well as increasing the annual amount by 5% from 2024 to 2027. It is equipped with a gas processing capacity of 10 billion standard cubic feet per day, operating eight gas processing plants and a pipeline network of more than 3,250 km.

The result reflects rising natural gas prices in European markets as a result of declining Russian gas supplies to Ukraine, prompting European buyers to seek alternatives. Higher natural gas prices helped ADNOC Gas post a 55% increase in revenues in the fiscal year ended 31 October compared to the previous year. The company's return on assets also increased from 0.7 to 1.1. They also reported that natural gas export revenues in the last fiscal year increased by 16%. This was partly due to increased demand from European markets beyond Ukraine.

ADNOC Gas is investing in natural gas development projects to meet growing energy demand in the United Arab Emirates. This includes a $5 billion investment to expand a liquefied natural gas plant at the port of Jebel Ali.  The company announced that it will continue to invest in infrastructure to meet energy demand in Arab countries and to remain at the forefront of innovation in global energy markets.