Abu Dhabi National Oil Company (ADNOC) announced today the successful closing of its offering of approximately 375 million shares in ADNOC Distribution (the Share Offering), representing approximately 3 percent of the registered share capital of ADNOC Distribution.
It also issued approximately USD1.195 billion of senior unsecured bonds (the Exchangeable Bonds) due 2024 that are exchangeable into existing shares of ADNOC Distribution constituting approximately 7 percent of the registered share capital of ADNOC Distribution (ISIN: AEA006101017) (ADX Symbol: ADNOCDIST) under certain conditions (the Exchangeable Bond Offering and, together with the Share Offering, the Combined Offering).
In total, the Combined Offering resulted in proceeds of USD1.64 billion for ADNOC.
Following a successful book-building process, the Combined Offering was placed at a blended price of AED 4.82 per share, which is 5.7 percent above the current 3-month volume weighted average share price and less than 1 percent below today’s closing price of AED4.85. 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 US Dollars (USD) and bear a coupon of 0.70 percent. The Exchangeable Bonds are issued at an issue price of 100 percent and will be exchangeable into existing shares of ADNOC Distribution at an exchange price of AED 5.01 (USD 1.37) under certain conditions.
The innovative deal structure has the potential to increase the free float of ADNOC Distribution to 30 percent assuming the Exchangeable Bonds are exchanged and settled in shares, bringing greater liquidity to ADNOC Distribution shares and diversifying the shareholder base, while the blended price of the Share Offering and the Exchangeable Bond Offering improves the overall value of the sell down to ADNOC Group, and the UAE. Following the transaction, ADNOC will retain at least a 70 percent 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.”
Since its IPO, ADNOC Distribution has delivered sound business results and demonstrated to customers and investors its resilience and steadfast focus on safe, smart growth and a progressive dividend policy.
The underlying exchange property of the Exchangeable Bonds will be subject to customary adjustments upon the occurrence of certain corporate events pursuant to the terms and conditions of the Exchangeable Bonds.
Settlement of the Share Offering is expected to occur on or about May 31, 2021, and settlement of the Exchangeable Bond Offering is expected to occur on or about June 4, 2021. 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.
Citigroup Global Markets Limited and First Abu Dhabi Bank PJSC acted as the Joint Global Coordinators and Joint Bookrunners for the Share Offering. Citigroup Global Markets Limited acted as the Global Coordinator and Bookrunner, with Abu Dhabi Commercial Bank PJSC and First Abu Dhabi Bank PJSC acting as Co-Bookrunners, for the Exchangeable Bond Offering (collectively, the “Banks”).
