ABU DHABI, 31st May, 2022 (WAM) — Abu Dhabi National Oil Company (ADNOC) together with its long-standing partner Borealis AG today announced the successful completion of the bookbuild and public subscription process for the Initial Public Offering (IPO) of Borouge plc, their petrochemicals joint venture, on the Abu Dhabi Securities Exchange (ADX).
The offering of 3,005,769,158 ordinary shares (Offer Shares), equivalent to 10% of total issued share capital, and an offer price of AED2.45 per ordinary share, results in gross proceeds of over $2 billion to ADNOC and Borealis, together the “Selling Shareholders”, upon settlement.
The Offering was significantly oversubscribed and experienced overwhelming demand from UAE Retail Investors and Qualified Institutional Investors. Total gross demand for the IPO amounted to over $83.4 billion, implying an oversubscription level of almost 42 times in aggregate.
The book was covered within less than one hour of the start of the public subscription process, with the Offering seeing the highest subscription levels by UAE retail investors in any UAE IPO in almost two decades, with total demand of over $17.9 billion. It also marked the largest demand for an ADNOC company IPO to date.
The expected date of listing on the ADX is 3rd June 2022. Upon listing, ADNOC will continue to own a majority 54% stake in Borouge, while Borealis ME will hold 36%.
Borouge is the fourth company that ADNOC has brought to market since 2017 and follows the highly successful IPOs of ADNOC Distribution, ADNOC Drilling and Fertiglobe.
Borouge has a robust financial profile, with full-year revenue of $5.5 billion in 2021 and profit for the year of $1.5 billion for its ADP business only, with a track record for very strong cash flow generation that supports its capacity to pay highly competitive future dividends. For 2022 the Company expects to pay $975 million in dividends to shareholders. In 2023, Borouge expects to pay no less than $1.3 billion for the full-year period, equivalent to a dividend yield of 6.5% based on the price per share announced for the Offering.
Borouge, established in 1998, combines the strength and experience of ADNOC and Borealis, through Borouge ADP, its Operations joint venture headquartered in Abu Dhabi, and Borouge PTE, its Sales and Marketing joint venture headquartered in Singapore.
Central to Borouge’s growth strategy will be the continued growth of its product portfolio through innovation, sustainable solutions, new product development and strategic market and geographic expansion. The Company will focus on offering its differentiated product offering and industry-leading innovation capabilities to premium pricing end-markets, including access to and use of Borealis’ Borstar technology, enabling Borouge to offer tailored solutions for demanding end-use applications integral to everyday life.
Borouge will also benefit from ADNOC’s recent equity investment in Borealis, which further expands ADNOC’s long-standing partnership with Borealis while accelerating the delivery of ADNOC’s broader Downstream and Industrial growth program. ADNOC is well-positioned to capitalise on growth opportunities in the chemicals and petrochemical sector globally, building on its world-class refining and petrochemicals facilities in Al Ruwais Industrial City, Abu Dhabi.
ADNOC has already embarked on a major expansion drive in this space, including the recently announced Borouge 4 complex and the TA’ZIZ Industrial Chemicals Zone in Ruwais.
Over the last six years, ADNOC has actively managed its businesses and capital, as well as successfully developing a more open, flexible and innovative partnership model across its integrated upstream and downstream value chain. This value creation and growth strategy is enabled by a $122 billion (AED447.7 billion) capital investment programme across the Group between 2021 to 2025.