ADNOC Announces Offering Of Approximately 3.1 Billion Shares Of ADNOC Gas To Enhance Liquidity And Diversify Shareholder Base

Abu Dhabi National Oil Company (ADNOC) plans to offer around 3.1 billion shares of ADNOC Gas, representing 4% of the company's share capital. This move aims to increase liquidity and diversify the shareholder base. The offering is set to begin immediately and close by February 21, 2025, though ADNOC may choose to accelerate this timeline.

ADNOC Gas has shown strong financial performance since its IPO in March 2023. Khaled Al Zaabi, Group Chief Financial Officer at ADNOC, stated, "Since its IPO in March 2023, ADNOC Gas has consistently delivered strong growth, robust financial performance and superior shareholder returns." This success positions the company well for future expansion.

The offering will be available to qualified institutional investors in various countries, including the UAE. It will adhere to Rule 144A and Regulation S of the U.S. Securities Act of 1933. Only professional investors as defined by the UAE Securities and Commodities Authority can participate.

ADNOC holds about 90% of ADNOC Gas's share capital before this offering. The final number of shares and their price will be determined after the bookbuild process concludes. All proceeds from the sale will go to ADNOC, with no dilution for existing shareholders.

ADNOC Gas reported an adjusted net income of $5 billion for 2024, marking its highest since going public. The fourth quarter alone saw a net income of $1.38 billion, surpassing Bloomberg's consensus estimates. This aligns with their updated growth strategy announced in November 2024.

The company aims for over 40% adjusted EBITDA growth by 2029, supported by a strong balance sheet and free cash flow generation. A progressive dividend policy is also planned, with a projected annual increase of 5% per share in dividends over upcoming years.

Market Impact and Index Inclusion

This offering is expected to boost trading activity in ADNOC Gas shares and potentially lead to inclusion in major indices like MSCI Emerging Market Index and FTSE Emerging Market Index during the next quarterly review. Meeting all criteria could broaden investor awareness globally.

The offering aligns with ADNOC’s goal to enhance Abu Dhabi's equity capital market while ensuring sustainable returns for investors across its portfolio. Both ADNOC Group and ADNOC Gas will face a lock-up period of 180 days post-settlement unless waived by Joint Global Coordinators.

Joint Global Coordinators

BofA Securities, Citi, EFG-Hermes, First Abu Dhabi Bank, HSBC, and International Securities are serving as Joint Global Coordinators and Joint Bookrunners for this offering.

This strategic move supports ADNOC’s long-term objectives by increasing liquidity in ADNOC Gas shares while diversifying its investor base through this secondary placement.

With inputs from WAM