The offer price for the initial public offering (IPO) of Borouge, their petrochemicals joint venture, has been announced by Abu Dhabi National Oil Company (ADNOC) and Borealis.
The price per share for the offering to be listed on the Abu Dhabi Securities Exchange (ADX), has been set at Dhs2.45, implying an equity value of Dhs73.6bn ($20bn). This makes the Borouge IPO the largest-ever listing to date in Abu Dhabi’s history.
The offer price was determined by ADNOC and Borealis (selling shareholders) following investor engagement that saw strong initial demand indications from both local and international investors, official news agency WAM reported.
On May 22, 2022, the selling shareholders and Borouge entered into cornerstone investment agreements with entities controlled by International Holding Company, Multiply Group, and Alpha Dhabi Holding, who has committed to subscribe for shares in the offering valued at $50m; $50m; and $100m respectively, a regulatory announcement on Borouge’s website revealed. Furthermore, ADQ has committed $120m; Abu Dhabi Pension Fund has committed $100m; Emirates Investment Authority has committed $75m; and the Adani Family has committed $75m, in each case, directly or indirectly, like subscription amounts for shares in the offering. All of the investors have committed to purchasing shares at the offer price, subject to a minimum six-month lock-up period.
The IPO subscription period has commenced today, May 23, and will close to retail investors on May 28, 2022, and to institutional investors on May 30, 2022. The expected date of listing on the ADX is June 3, 2022.
Borouge reported full-year revenue of $5.5bn in 2021 and profit for the year of $1.5bn for its ADP business only. For 2022, the company expects to pay $975m in dividends to shareholders and follow that up with no less than $1.3bn for the full-year period in 2023, equivalent to a dividend yield of 6.5 percent based on the price per share announced for the offering.
Borouge, established in 1998, has two ventures ADP, its operations joint venture headquartered in Abu Dhabi, and PTE, its sales, and marketing joint venture headquartered in Singapore. Borouge, through ADP and PTE, employs over 3,100 people and caters to customers in more than 50 countries across Asia, the Middle East, and Africa.
Borouge is a provider of polyolefin solutions for the agriculture, infrastructure, energy, advanced packaging, mobility, and healthcare industries. The Borouge portfolio of products comprises polyethylene and polypropylene, which have applications in sustainable packaging, pipes and fittings, wires and cables, and automotive and medical products.
Borouge’s polymer solutions are categorized into two main product segments: consumer solutions and infrastructure solutions. Consumer solutions include sustainable packaging, medical containers, and greenhouse films, while infrastructure solutions include water and gas pipes and cables for power transmission.
Earlier this month, ADNOC said that it would acquire a 25 percent shareholding in Borealis from Mubadala. When the transaction is complete, Borealis will be owned 25 percent by ADNOC and 75 percent by OMV, an Austrian multi-national integrated oil, gas, and petrochemical company listed on the Vienna Stock Exchange.
