Abu Dhabi National Oil Company (ADNOC) is reportedly seeking to raise about $1 billion through an initial public offering (IPO) of its logistics unit. The move is part of the company’s broader efforts to raise funds and attract foreign investment to support its ambitious growth plans.
According to sources familiar with the matter, ADNOC is working with several banks, including First Abu Dhabi Bank and Goldman Sachs, to prepare for the IPO. The offering is expected to take place later this year or early next year, subject to market conditions.
ADNOC’s logistics unit, known as ADNOC Logistics & Services, provides a range of services to support the company’s upstream and downstream operations. This includes the transportation of crude oil, refined products, and other materials, as well as marine and port services. ADNOC L&S also provides services such as engineering and maintenance, supply chain management, procurement, and inventory management. The unit operates a fleet of vessels to transport crude oil, refined products, petrochemical feedstocks and other materials from the United Arab Emirates (UAE) to international markets.
The IPO is part of ADNOC’s broader strategy to optimize its assets, monetize its non-core businesses, and attract foreign investment. The company has been pursuing a range of initiatives to diversify its revenue streams, reduce its reliance on oil sales, and invest in new growth areas.
In recent years, it has launched several successful IPOs, including the $1.7 billion offering of its drilling unit, Drilling, in 2018. The company has also attracted significant foreign investment, including a $10 billion investment from a consortium of investors led by BlackRock and Apollo Global Management in 2019.
The IPO of ADNOC L&S is expected to generate significant interest from investors, given the company’s strong track record and the continued growth of the logistics sector in the Middle East. According to a report by Frost & Sullivan, the logistics sector in the region is expected to grow at a compound annual growth rate (CAGR) of 5.7% between 2020 and 2025, driven by the expansion of e-commerce and the growth of trade between the Middle East and Asia.
The IPO is also expected to provide a boost to the Abu Dhabi stock market, which has been relatively quiet in recent years. The listing of ADNOC Drilling in 2018 was a major milestone for the market, and the IPO of ADNOC L&S is expected to generate similar excitement.
The proceeds from the IPO are expected to be used to fund ADNOC’s growth plans, which include a range of strategic investments in new areas such as renewable energy, petrochemicals, and hydrogen. The company is also planning to expand its downstream operations, including the construction of a new refining and petrochemicals complex in Abu Dhabi.
The IPO of ADNOC L&S is expected to be one of the largest offerings in the Middle East in recent years, and it is likely to attract significant interest from investors around the world. However, the success of the offering will depend on a range of factors, including market conditions, investor sentiment, and the company’s ability to deliver strong financial performance.
In conclusion, ADNOC’s plan to raise about $1 billion through an IPO of its logistics unit is a significant development for the company and the Abu Dhabi stock market. The offering is expected to generate significant interest from investors and provide a boost to the local economy. The proceeds from the IPO will be used to fund ADNOC’s ambitious growth plans, which include investments in new areas such as renewable energy and hydrogen. However, the success of the offering will depend on a range of factors, and it remains to be seen how the market will respond.