Adnoc, OCI Plan to Sell Fertilizer Shares in Abu Dhabi IPO
Adnoc, OCI Plan to Sell Fertilizer Shares in Abu Dhabi IPO
(Bloomberg) -- Abu Dhabi‘s state energy company and OCI NV plan to list their Middle Eastern fertilizer venture, just as prices soar.
Amsterdam-based chemicals producer OCI and Abu Dhabi National Oil Co. will offer 13.8% of Fertiglobe in an initial public offering, they said in a statement Tuesday. The deal will follow the IPO of Adnoc Drilling Company PJSC, whose stock soared on its trading debut Sunday after a $1.1 billion share sale.
Fertiglobe’s shares are expected to start trading in Abu Dhabi in late October, the statement said. The listing could be one of the biggest to date in the emirate and benefit from a rebound in fertilizers sales over the past year, amid a broad commodities rally as economies recover from the coronavirus pandemic. Prices have been given an extra lift in recent weeks by energy crises in Europe and China, as coal and natural gas are important fertilizer feedstocks.
The company may be valued at about $7 billion including debt, Bloomberg reported in April.
Adnoc, which pumps almost all the oil and natural gas in the United Arab Emirates, is increasingly seeking to raise money from its assets and help the government fund efforts to diversify the economy.
Since mid-2020, the energy firm has raised around $15 billion by selling leasing rights over pipelines and property to the likes of Brookfield Asset Management Inc. and Apollo Global Management Inc.
The main banks managing Fertiglobe’s IPO are Citigroup Inc., First Abu Dhabi Bank PJSC, HSBC Holdings Plc and Morgan Stanley.
The company, 58% owned by OCI and 42% by Adnoc, operates four fertilizer and chemical facilities in Abu Dhabi, Egypt and Algeria. It is a key part of Adnoc’s plans to become an exporter of blue hydrogen in the next decade. The fuel is created by converting gas and is typically shipped in the form of ammonia.
Fertiglobe is the world’s largest seaborne exporter of ammonia and urea combined and the biggest producer in the Middle East, according to the statement.
More from the statement:
- Fertiglobe generated revenues of $1.55 billion in 2020 and $1.26 billion in the first six months of 2021
- Operating cashflow of $521 million in 2020 and $482 million for the first half of this year
- Fertiglobe’s natural gas costs will probably average $2.8 per metric million British thermal units until the end of this year, and roughly $3 per MMBtu for 2022
- Gas supply contracts range from seven to 23 years
- NOTE: Gas is currently trading around $33 per MMBtu in Asian and European spot markets
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