Mideast Fertilizer Firm Fertiglobe Raises $800 Million in IPO Backed by Singapore
(Bloomberg) -- Abu Dhabi’s state energy company and OCI NV raised $795 million by listing their Middle Eastern fertilizer venture, drawing around $17 billion of orders from investors including a Singapore sovereign wealth fund and U.S. hedge fund manager Jeff Ubben.
Fertiglobe Holding shares were sold at 2.55 dirhams each, the middle of the price range, Abu Dhabi National Oil Co. and Amsterdam-based OCI said on Wednesday. The company will be valued at $5.8 billion and the stock will start trading in Abu Dhabi on Oct. 27.
Singapore’s GIC Pte and Ubben’s Inclusive Capital Partners had committed $150 million between them before the final terms were announced. Just under 14% of Fertiglobe will be listed.
Fertiglobe’s sales have soared over the past year, with the global economic recovery from the coronavirus pandemic boosting commodity prices. Demand has grown even more in recent weeks as European fertilizer rivals cut production amid an energy crisis.
IPOs in Demand
The company attracted enough orders to cover the top end of its initial price range of 2.45 dirhams to 2.65 dirhams on the first day. Citigroup Inc., First Abu Dhabi Bank PJSC, HSBC Holdings Plc and Morgan Stanley managed the listing.
It is the latest in a string of Middle Eastern deals. Adnoc’s drilling unit surged 30% on its trading debut earlier this month after a $1.1 billion IPO, the biggest-ever in the United Arab Emirates’ capital.
In neighboring Saudi Arabia, ACWA Power International got more than $300 billion of orders for a $1.2 billion IPO, while the listing of Saudi Telecom Co.’s internet-services unit was also heavily oversubscribed.
OCI now owns around half Fertiglobe’s stock, while Adnoc has cut its holding to 36.2% from 42%.
The company operates four fertilizer and chemical plants in Abu Dhabi, Egypt and Algeria. It is a key part of Abu Dhabi’s efforts to export hydrogen, a fuel seen as crucial to the global transition away from coal and oil. Adnoc is investing in so-called blue hydrogen, created by converting gas and capturing the carbon dioxide emissions. It is usually shipped in the form of ammonia.
Fertiglobe made revenue of $1.55 billion in 2020 and $1.26 billion in the first six months of 2021. This month it raise dividend guidance for the second half of the year to $200 million from $150 million.
Adnoc, which pumps almost all the oil and gas in the UAE, is 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.
Fertiglobe’s IPO is Adnoc’s second listing of a subsidiary this year, after that of Adnoc Drilling.
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