ADNOC Finalizes $935 Million Institutional Share Placement In Drilling Division

Abu Dhabi National Oil Company (ADNOC) announced the successful placement of 880 million shares in ADNOC Drilling Company to institutional investors. This transaction represents 5.5% of ADNOC Drilling’s total issued and outstanding share capital, increasing the company’s free float to 16.5%. The shares were priced at AED3.90 each, approximately 70% above the Initial Public Offering (IPO) price of AED2.30 per share, and a 5.6% discount to the closing price on 22nd May 2024.

The settlement of this offering is expected to occur around 28th May 2024. ADNOC retains a majority shareholding of 78.5% in ADNOC Drilling and has agreed not to sell further shares for six months following the closing of this offering, subject to customary exceptions.

The offering saw robust demand from institutional investors both in the GCC and internationally. Khaled Al Zaabi, Group Chief Financial Officer of ADNOC, stated, "The significant interest our offering generated from both domestic and international investors is testament to ADNOC Drilling’s growth trajectory since its IPO and its future growth potential."

Al Zaabi added that ADNOC remains a committed, long-term majority shareholder and looks forward to continuing its support of ADNOC Drilling, which plays a crucial role in ADNOC’s strategic growth initiatives and the Abu Dhabi financial market.

ADNOC Drilling’s first quarter 2024 financial results highlighted strong revenue and earnings, enhanced dividend distribution, and progress on unconventional projects. The increased free float is expected to pave the way for potential inclusion in the Morgan Stanley Capital International (MSCI) Emerging Market Index at the next quarterly review, provided ADNOC Drilling meets all relevant criteria.

Inclusion in the MSCI index would diversify ADNOC Drilling’s investor base and broaden awareness of its value proposition. This move aligns with ADNOC's strategy to enhance market visibility and attract a wider range of investors.

Key Players in the Offering

EFG Hermes UAE Limited (acting with EFG Hermes UAE LLC), First Abu Dhabi Bank PJSC, Goldman Sachs International, and J.P. Morgan Securities PLC served as Joint Global Coordinators and Joint Bookrunners for this offering.

This successful placement underscores investor confidence in ADNOC Drilling’s performance and future prospects, reinforcing its position as a key player in the oil drilling sector.

With inputs from WAM