Adnoc to sell about 5.5% additional stake in drilling unit

ABU Dhabi National Oil Company plans to sell a roughly 5.5 per cent stake in its drilling unit, more than two years after it raised US$1.1 billion from an initial public offering (IPO) of part of the business, it said on Wednesday (May 22).

Additional shares in the unit will be offered to eligible institutional investors, the company said.

Adnoc Drilling’s shares closed at 4.13 dirhams on Wednesday. At that valuation, the 5.5 per cent stake being offered would be worth US$989.6 million.

The bookbuilding for the offering of about 880 million shares will begin “immediately” and end on May 23 or earlier, after which the offer price and final number of shares sold will be determined, Adnoc said in a statement.

Increasing Adnoc Drilling’s free float is expected to lead to the company’s inclusion in the Morgan Stanley Capital International Emerging Market Index, Adnoc said. That could happen at the next quarterly index review, subject to Adnoc Drilling meeting criteria, it added.

After selling an 11 per cent stake in October 2021, Adnoc currently owns 84 per cent of Adnoc Drilling, while Baker Hughes owns a further 5 per cent.

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The IPO was priced at 2.3 dirhams a share, and the stock soared about 30 per cent on its debut.

The new sale “supports Adnoc’s commitment to further strengthen the Abu Dhabi equity capital market while creating sustainable value for shareholders across its listed portfolio”, the state oil giant said.

Egyptian investment bank EFG Hermes, First Abu Dhabi Bank, Goldman Sachs and JPMorgan Securities are joint global coordinators and bookrunners for the offering. REUTERS