Abu Dhabi is gearing up for the next big IPO, this time from Borouge, an ADNOC subsidiary.
Borouge operates a petrochemical complex in Abu Dhabi and is one of the UAE’s industrial shining lights. The IPO will sell nearly 3 billion shares, giving the stock market another heavyweight in Abu Dhabi. This stake sale represents 10% of the issued 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 common with recently listed companies, the first in September for $325 million and the second in March for $650 million. (These are projections for 2022.) In 2023, the company plans to pay a staggering $1.3 billion in dividends.
ADP intends to pay a $250 million dividend to current shareholders before the offering closes.
ADNOC and Borealis, the existing shareholders,’ retain the right’ to change the size of the offering at any time before pricing it. Given the likelihood of interest from strategic investors, analysts believe this option could be pursued.
“Through 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 drive sustainable growth for Abu Dhabi and the UAE, ADNOC continues to unlock and maximize value across its integrated upstream and downstream asset base.”
Borealis, an ADNOC partner in Borouge, is the world’s eighth-largest producer of polyethylene and polypropylene, with headquarters in Vienna.
ADNOC’s go-to-market strategy with its subsidiaries or key 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 can be found on ADX.
“ADNOC is bringing to the market a UAE-based, globally competitive market leader,” Al Jaber continued. This world-class company offers cutting-edge manufacturing, consumer, and infrastructure solutions, as well as cutting-edge technologies. All UAE citizens and residents, as well as qualified international and local institutional investors, will be able to participate in this latest offering.”
