Abu Dhabi National Oil Company (ADNOC) is reportedly seeking to raise around $750 million from its drilling unit’s initial public offering (IPO) in what is expected to be one of the biggest share sales in the United Arab Emirates.
The Middle East’s biggest drilling firm, Adnoc Drilling, has already set the price for its listing at 2.30 dirhams per share, which implies an equity value of $10 billion. This offering will represent 1.2 billion shares (around 7.5%) of the firm. Nonetheless, Adnoc Drilling has stated that it might increase the amount of stock available.
This offering comes amid a push by Abu Dhabi to revive initial public offerings on its stock exchange. The ADX is now offering a range of additional incentives, including some promises to reduce or waive listing fees and flexibility on the minimum stake size required for share sales.
On its part, Adnoc Drilling has also started preparations for a possible IPO of its fertilizer joint venture Fertiglobe with sovereign wealth fund ADQ aiming to list Abu Dhabi Ports by the end of this year.
The UAE is the third-biggest producer in the Organization of Petroleum Exporting Countries (OPEC) and has managed to use its oil wealth to expand and diversify its economy. The United Arab Emirates has managed to diversify successfully into tourism and has developed global transport and trade hubs.
Nevertheless, these industries suffered throughout 2021 as the coronavirus pandemic caused major declines in international travel, cut energy use, and blocked trade flows.