Abu Dhabi: The UAE's energy powerhouse ADNOC has successfully closed its offer of approximately 375 million shares in ADNOC Distribution, representing around 3 per cent of the registered share capital.
It also issued $1.195 billion of senior unsecured bonds due 2024 that are exchangeable into existing shares of ADNOC Distribution, constituting about 7 per cent of the registered share capital. In total, the combined offering resulted in proceeds of $1.64 billion for ADNOC.
Following the book-building process, the combined offering was placed at a blended price of Dh4.82 per share, which is 5.7 per cent above the current 3-month volume weighted average share price and less than 1 per cent below Wednesday’s closing price of Dh4.85. The combined offering was covered in less than one hour, and saw significant demand from regional and international investors.
The exchangeable bonds, with a maturity date of 2024 (except in the case of early redemption), are denominated in dollars and bear a coupon of 0.70 per cent. The exchangeable bonds are issued at an issue price of 100 per cent and will be exchangeable into existing shares of ADNOC Distribution at an exchange price of Dh5.01 ($1.37) under certain conditions.
ADNOC has agreed to a lock-up period of 90 calendar days from the settlement date under the terms of both the share offering and exchangeable bond offering. An application is expected to be made for admission of the exchangeable bonds to listing on the Vienna MTF, an exchange-regulated market operated by the Vienna Stock Exchange.
Raise the free float
The innovative deal structure has the potential to increase the free float of ADNOC Distribution to 30 per cent, assuming the exchangeable bonds are exchanged and settled in shares, thus diversifying the shareholder base. The blended price of the share offering and the exchangeable bond offering improves the overall value of the sell down to ADNOC Group.
Following the transaction, ADNOC will retain at least a 70 per cent strategic stake in the company as it continues to see significant growth potential in ADNOC Distribution. Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC, said: “The success of this innovative and pioneering combined offering - the first of its kind in the GCC - once again highlights the attractive investment opportunities and environment provided by ADNOC and, more broadly, Abu Dhabi and the UAE.
“We were delighted to see exceptionally strong demand and a number of new world-class institutional investors participate in both the share offering and exchangeable bond offering, reinforcing the attractiveness of ADNOC Distribution and bringing new FDI into the UAE.
“This transaction further increases the free float in ADNOC Distribution, in line with commitments we made at the time of the company’s IPO in December 2017. We remain confident in and committed to the company’s future success.”