GIC to buy US$70m stake in Fertiglobe Holding ahead of IPO

[DUBAI] Abu Dhabi's state energy company and OCI NV are selling a stake worth as much as US$830 million in their Middle Eastern fertiliser venture to buyers including a Singapore sovereign wealth fund and US activist investor Jeff Ubben.

OCI and Abu Dhabi National Oil are offering 13.8 per cent of Fertiglobe Holding in an initial public offering that comes as the business booms, thanks in part to a natural-gas shortage hurting rivals in Europe. The firm will be valued at US$6 billion at the top end of the price range.

Singapore's GIC, Ubben's Inclusive Capital Partners and Abu Dhabi's state pension fund have committed US$231 million. Ubben, who's on the board of Exxon Mobil will join Fertiglobe as an independent board member after the listing.

Ubben left the US$13 billion hedge fund ValueAct Capital last year to launch Inclusive Capital Partners, which backs companies tackling problems including climate change.

Fertiglobe is a key part of Abu Dhabi's efforts to export hydrogen, a fuel seen as crucial to the transition away from coal and oil. Adnoc is investing in so-called blue hydrogen, created by converting gas and capturing the carbon dioxide emissions.

The global economic rebound from the pandemic and a broad rally in commodities have boosted Fertiglobe. In recent weeks, the company's benefited from the gas crunch that's forced the closure of some fertiliser plants in Europe and Asia.

The price range for the offer was set at 2.45 (S$0.90) to 2.65 dirhams (S$0.97) per share and the deal has already attracted enough demand to cover the top end, according to terms seen by Bloomberg.

Inclusive Capital Partners and the Abu Dhabi pension fund have committed around US$80 million each, while GIC will invest US$70 million.

The final price will be announced on Oct 20 and the stock is set to start trading on Abu Dhabi's bourse a week later.

Fertiglobe has locked in long-term supplies of cheap gas and has increased sales to Europe, chief executive officer Ahmed El-Hoshy told Bloomberg in an interview this month. On Wednesday, the company raised dividend guidance for the second half of 2021 to US$200 million from US$150 million, and to US$400 million from US$315 million for next year.

The company, 58 per cent owned by OCI and 42 per cent by Adnoc, operates four fertiliser and chemical plants in Abu Dhabi, Egypt and Algeria.

Adnoc, which pumps almost all the oil and natural gas in the United Arab Emirates, is increasingly seeking to raise money from its assets and help the government fund efforts to diversify the economy. Since mid-2020, the energy firm has raised around US$15 billion by selling leasing rights over pipelines and property to the likes of Brookfield Asset Management and Apollo Global Management.

Fertiglobe's IPO will be Adnoc's second listing of a subsidiary this year, following a US$1.1 billion deal for its drilling unit.

BLOOMBERG