ADNOC L&S Secures Hybrid Capital Instrument For Growth Financing

ADNOC Logistics & Services Plc has secured a Hybrid Capital Instrument (HCI) valued between $1.1 billion and $2.0 billion (AED4.0-7.3 billion). The initial draw from this facility amounts to $1.1 billion (AED4.0 billion), leaving an additional $0.9 billion (AED3.3 billion) available until 31st December 2026.

The company plans to allocate around $1 billion (AED3.7 billion) of the HCI towards acquiring Navig8, with the remaining funds earmarked for other strategic investments. The first drawdown features pricing below SOFR+150bps and offers repayment flexibility at ADNOC L&S's discretion.

Since its IPO in June 2023, ADNOC L&S has committed over $5 billion (AED18.4 billion) towards growth investments, aligning with its strategy to become a leading energy maritime and logistics entity. This financing supports their transformational growth objectives announced during the IPO.

The company's target leverage ratio is set at 2.0 – 2.5x net debt: EBITDA, as stated during the IPO. By securing equity financing at competitive rates, ADNOC L&S aims to maintain this leverage while ensuring investor returns and creating room for further growth opportunities.

This financial arrangement was organised by Societe Generale, with contributions from Abu Dhabi Commercial Bank, First Abu Dhabi Bank, Crédit Agricole Corporate and Investment Bank, BBVA, and DBS Bank.

Captain Abdulkareem Al Masabi, CEO of ADNOC L&S, expressed satisfaction with the transaction's conclusion: "We are pleased to have concluded this financing transaction and have received strong interest in the bank market and firm support from our new partners."

The combination of existing cash reserves, the new finance facility, and revenue from contracted vessels positions ADNOC L&S well for pursuing value-accretive growth opportunities in line with its strategic vision.

This comprehensive funding approach ensures that ADNOC L&S remains adequately financed to capitalise on future investments while adhering to its growth strategy.

With inputs from WAM