Page 4 - MEOG Week 39 2021

MEOG COMMENTARY MEOG

IPO fever sees ADNOC

Drilling sale oversubscribed

ADNOC has closed the book on the listing of its drilling
arm, with the sale more than 30 times oversubscribed.

UAE ABU Dhabi National Oil Co. (ADNOC) com- designer Helmerich & Payne (H&P) 1%, which
pleted the initial public offering (IPO) of its drill- it acquired after ADNOC Drilling recently
ing unit this week in a sale that was more than 30 bought eight land rigs from the American firm
WHAT: times oversubscribed. for $86.5mn.
The listing raised $1.1bn The share sale is the largest yet for Abu Dhabi, The shares were allocated in three tranches:
for ADNOC after it sold which has in recent years carried out an array of the first 10% was reserved for UAE retail inves-
more shares than asset monetisation and IPO deals worth many tors; the second tranche made up 86% and was
previously advised. billions of dollars, highlighting investor appetite reserved for local, regional and international
for opportunities in the Middle East’s most sta- qualified institutional investors, while the
WHY: ble countries. The oversubscription appears to be remaining 4% was reserved for the employees
It provides another par for the course on energy-related deals in the and UAE national retirees of ADNOC and its
example of the oil giant’s region, with deals throughout the Gulf Co-op- subsidiaries.
successful strategy of eration Council (GCC) continuing to attract The IPO was led by First Abu Dhabi Bank,
privatisation and asset widespread interest. Goldman Sachs, HSBC Holdings and JP Morgan
monetisation, which Chase & Co. ADNOC said that the offer price
has been the blueprint IPO was determined by it and the subsidiary on the
for similar moves in the The parent sold 11% in ADNOC Drilling for back of strong initial demand indications from
region. $1.1bn with shares offered at AED2.30 ($0.62), local and international investors.
receiving for more than $34bn worth of orders. The parent had said it would sell a minimum
WHAT NEXT: The deal valued the drilling unit at $10bn, below of 7.5% to raise at least $750mn but reserved
Saudi Arabia’s Arabian the $11bn valuation achieved in October 2018 the right to increase the number of shares sold,
Drilling Co. appears likely when GE subsidiary Baker Hughes acquired a which it exercised ahead of the transaction.
to follow suit before the 5% stake in the company for $550mn. ADNOC Drilling is the largest driller in the
end of the year. Shares are expected to begin trading on the region and has a fleet of 107 rigs, 96 of which are
Abu Dhabi Securities Exchange (ADX) on Octo- owned, and 11 rigs rented. These comprise 75
ber 3. At this point, ADNOC will retain a stake onshore rigs, 20 offshore jack-up rigs, 11 island
of 84%, Baker Hughes 5% and US rig owner and rigs and a self-propelled barge.

P4 www. NEWSBASE .com Week 39 29•September•2021