The initial public offering of Adnoc Logistics & Services got enough orders to cover all shares within minutes, showing continued strong demand for listings in the Middle East.
Abu Dhabi National Oil Co. is selling about 1.11 billion shares in its maritime logistics unit at Dh1.99 to Dh2.01 each, valuing the company at as much as $4.05 billion, according to a statement on Tuesday.
Order books for the IPO, which could raise as much as $607 million at the top end, were covered throughout the range and indicated demand exceeded deal size, according to a message to investors seen by Bloomberg News.
The institutional bookbuilding period runs until May 24, with pricing set for May 25. The retail offering will close on May 23 while the shares are expected to start trading on June 1.
Al Seer Marine Supplies & Equipment Co PJSC, National Marine Dredging Co PJSC, Alpha Oryx Ltd. - ultimately owned by Abu Dhabi wealth fund ADQ - and Abu Dhabi Pension Fund have committed to become cornerstone investors and subscribed for about $180 million combined.
The deal is the second listing of a unit by state-owned Adnoc this year, after it raised $2.5 billion in the IPO of its gas business in March. It's also set to be the second-biggest IPO in the Middle East so far this year.
Adnoc has been selling stakes in its units since about 2017 as part of a strategy to help fund the diversification of the economy and reduce its reliance on fossil fuels. It listed chemicals firm Borouge last year and has previously sold shares in its drilling unit and fertilizer company Fertiglobe, among others.
Adnoc L&S plans to pay an annualised 2023 cash dividend of $260 million and expects to increase this by at least 5 per cent annually. The firm, which has been expanding its fleet to cope with increased demand from the state-owned firm's businesses, is targeting capital expenditure of $4 billion to $5 billion in the medium term.
It's also planning a compound annual growth rate of at least 10 per cent for its revenues in the mid-term.