Another ADNOC entity - Borouge - to go in for IPO, list on ADX

Dubai: Abu Dhabi is preparing for the next blockbuster IPO - this one from Borouge, the ADNOC affiliated entity.

Borouge operates a petrochemical complex in Abu Dhabi and is one of the shining lights within the UAE’s industrial space. Nearly 3 billion shares will be offload in the IPO, as Abu Dhabi offers another heavyweight to the stock market. This stake sale represents 10 per cent of Borouge’s issued share capital.

A joint venture between ADNOC and Borealis, Borouge - or Abu Dhabi Polymers Co. (ADP) - will follow the recent IPO from AD Ports Group. The retail part of the offering should run from May 23 to 28, while that for qualified investors would be from May 23 to 30.

As is becoming more common with recently listed entities, Borouge will pay dividends twice a year, with the first one after the IPO to total $325 million in September and another $650 million in March next year. (These are for 2022.) And for 2023, the company intends to pay whopping $1.3 billion as divided.

ADP intends to pay a dividend of $250 million to current shareholders before the closing date of the offering.

The existing shareholders – ADNOC and Borealis – ‘retain the right’ to amend the size of the offering at any time before pricing the offering. According to analysts, this option could well be followed through with, given the likely interest from strategic investors.

"Through Borouge and our recently announced 25 per cent equity investment in Borealis, ADNOC is poised to capitalize on the significant industrial and consumer-led growth in the petrochemicals sector over the coming decades," said Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, and ADNOC’s Managing Director and Group CEO. "ADNOC continues to consistently unlock and maximize value across its integrated upstream and downstream asset base in order to drive sustainable growth for the benefit of Abu Dhabi and the UAE.”

Borealis, the ADNOC partner in Borouge, is headquartered in Vienna, and is the world's eighth largest producer of polyethylene and polypropylene.

ADNOC's go-to-market plan

For ADNOC, this IPO from Borouge continues its go-to-market strategy with its subsidiaries or key ventures. In the recnt past, there was ADNOC Drilling, which came up with one of the most successful public floats in the UAE, as well as Fertiglobe, which is a joint venture. Another entity is also on ADX in the form of ADNOC Distribution.

Al Jaber added: “ADNOC is bringing to the market a UAE-based, globally competitive market leader. This world-class business provides cutting-edge manufacturing, consumer and infrastructure solutions and offers innovative technologies. This latest offering will be open to all citizens and residents of the UAE in addition to qualified international and local institutional investors.”