ADNOC Group's Fertiglobe decides to go for share buyback

Dubai: Another ADNOC company is going for a share buyback plan – Fertiglobe is seeking shareholder approval to acquire 2.5% of its free stock.

This comes just weeks after Borouge, the other listed ADNOC JV, also decided to go in for a 2.5% share buyback. Borouge’s shareholders gave the go-ahead this week for the company to proceed with the transaction, subject to market conditions and regulatory approvals.

On ADX, the Fertiglobe stock is trading at Dh2.1, with the 52-week range being Dh1.94 to Dh2.94. “The share buyback, if approved, will be overseen and managed by the Board of Directors, and may be modified, or discontinued at any time, with the 2.5% shares constituting the approved ceiling for the repurchase,” said the company in a statement.

A lot has already happened on the shareholding side at Fertiglobe. In October last, ADNOC completed the deal that saw it buy out the 50% stake held by Amsterdam-headquartered OCI. ADNOC as of now holds an 86.2% in Fertiglobe, with the remaining traded on the ADX.

In the recent past, another ADX-listed entity, the hospital operator Burjeel confirmed it is also planning a buyback. At the top of the ladder is the Abu Dhabi investment giant IHC, which is continuing a fairly active buyback program of Dh5 billion.

For H2-2024, the fertilizer company is paying $125 million (at 5.5 fils a share) as shareholder payout and taking the full-year tally to $275 million (12.2 fils a share). (The last day of entitlement for the H2-24 payout is April 17.)

"The proposal reflects Fertiglobe’s confidence in its long-term strategy and commitment to delivering sustainable value to shareholders," said a statement.

"Upon shareholder and regulatory approvals, the company would conduct the share buyback through open-market transactions in accordance with ADX regulations, with the quantity of shares repurchased dependent on market conditions and other factors," said a Fertiglobe statement.

Fertiglobe currently has an annual production capacity of 6.6 million tons of urea and merchant ammonia. This is produced at four of its subsidiaries in the UAE, Egypt and Algeria, 'making it the largest producer of nitrogen fertilizers in the Middle East and North Africa'.

Meanwhile, the petrochemicals company Borouge will be handing out $650 million (at 7.94 fils per share) as final dividend for 2024, for a yearly total of $1.3 billion (15.88 fils per share). (The last day for shareholders to be eligible for the dividend is April 15, with distribution on April 28.)

Borouge is going through a wider transformation, recasting itself as 'Borouge Group International'.

ADNOC and OMV will be the main shareholders in Borouge Group International, and once the transaction is done will offer an estimated total dividend of $2.2 billion - or equal to a minimum of 16.2 fils per share annually from 2026 to 2030.

"At the current Borouge share price, this would give investors a 40% minimum cumulative dividend return from 2025 to 2030, the highest in the UAE," said Dr. Sultan Al Jaber, Chairman of Borouge.

"Simply put, ADNOC and OMV are building a bigger, stronger, growth-orientated company that is focused on delivering superior total shareholder returns to our investors.”