Adnoc to float 15% of its maritime logistics subsidiary

Reuters/Toru Hanai

• Listing expected to open on May 16
• Adnoc L&S plans to pay dividends of $260 million for 2023
• Adnoc Gas raised $2.5bn in March in an offering of 5% of its shares

UAE’s Abu Dhabi National Oil Company (Adnoc) will float a 15 percent minority stake in its maritime logistics subsidiary, as the Gulf state ramps up plans to list government-backed entities.

The listing for Adnoc Logistics & Services (L&S) on the Abu Dhabi Securities Exchange is expected to open on May 16, the UAE state-owned Wam news agency reported.

Adnoc L&S has one of the region’s largest and most diverse shipping fleets and is among the largest operators and owners of self-propelled jack-up barges.

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In addition to its anchor customer, Adnoc, the company services over 100 global customers and ships to more than 50 countries through a fleet of more than 500 vessels, including 245 owned vessels.

On an unaudited pro forma basis and reflecting the acquisition of Zakher Marine International (ZMI Holdings) in 2022, Adnoc L&S revenue and adjusted interest, taxes, depreciation and amortization (Ebitda) was $2.3 billion and $599.3 million, respectively, for 2022, with revenue increasing at a compound annual growth rate of more than 20 percent from 2017 to 2022.

The company has a $4-5 billion capital expenditure programme for the medium term, Wam reported.

Adnoc L&S plans to pay dividends of $260 million for 2023, of which $65 million will likely be paid in October. Another $130 million is expected to be disbursed in April 2024.

After that, it expects to increase the dividend per share to more than five percent per annum over the medium term.

A wave of initial public offerings in Abu Dhabi shows little sign of abating, despite global market jitters and rising interest rates as investors bet on the emirate’s part-privatisation drive.

Adnoc Gas raised $2.5 billion in March in an offering of 5 percent of its shares, while data analytics firm Presight AI raised $496 million by selling a 24 percent stake.

Investor enthusiasm has boosted Abu Dhabi’s market capitalisation to AED 2.71 trillion ($736 billion) as of early April, having more than trebled over the last two years following several IPOs and a 57 percent rise on the bourse’s index.

“There’s a consistent theme across the region of governments seeking to reduce their stakes in government-owned companies,” Tarek Fadlallah, chief executive of Nomura Asset Management Middle East in Dubai told AGBI. “Those they can sell, they’re trying to sell.

“The story is the same region-wide. It’s just in the execution and implementation where there are subtle differences.”

Last year, 71 IPOs were completed in the Middle East for a combined transaction value of more than $25 billion, according to S&P Global Market Intelligence. That compares with $15 billion from 87 offerings in 2021.