ADNOC Completes $2.84 Billion Marketed Offering Of ADNOC Gas Shares To Institutional Investors

The Abu Dhabi National Oil Company (ADNOC) has successfully concluded the offering of 3.1 billion ordinary shares in ADNOC Gas plc to institutional investors. This transaction represents 4% of ADNOC Gas's total share capital, boosting the company's free float by 80% to reach a total of 9%. The shares were priced at AED3.40 each, which is about 43% higher than the initial public offering (IPO) price of AED2.37.

ADNOC Gas's recent financial performance has been strong, with an adjusted net income of $5 billion for 2024, marking its highest since the IPO. In the fourth quarter alone, the company reported a net income of $1.38 billion, surpassing Bloomberg's consensus estimates. This growth aligns with ADNOC Gas's strategic update from November 2024, which includes plans for acquiring Ruwais LNG and achieving over 40% adjusted EBITDA growth by 2029.

The offering attracted significant interest from institutional investors both in the GCC region and internationally, resulting in an oversubscription rate of 4.4 times. The final offer price was set at a competitive 5% discount compared to the closing share price of AED3.58 on February 20, 2025. The transaction generated gross proceeds of approximately $2.84 billion (around AED10.4 billion), with settlement expected around February 26, 2025.

ADNOC Group will maintain an 86% majority stake in ADNOC Gas and has committed not to sell additional shares for six months following the offering's closure, except under specific conditions or if waived by Joint Global Coordinators. This restriction aims to stabilize the market and protect shareholder interests during this period.

An increased free float could pave the way for ADNOC Gas's inclusion in major indices like Morgan Stanley Capital International (MSCI) Emerging Market Index and Financial Times Stock Exchange (FTSE) Emerging Market Index during their next quarterly review, provided all criteria are met. Such inclusion would diversify ADNOC Gas's investor base and enhance its visibility among global investors.

BofA Securities, Citi, EFG-Hermes, First Abu Dhabi Bank, HSBC, and International Securities served as Joint Global Coordinators and Joint Bookrunners for this offering. Their involvement underscores the significance of this transaction in expanding ADNOC Gas's market presence.

The successful completion of this share offering highlights ADNOC Gas’s robust market position and strategic growth initiatives. By increasing its free float and targeting index inclusion, ADNOC Gas aims to broaden its investor base while enhancing awareness of its value proposition globally.

With inputs from WAM