ADNOC share offering to value fuel retail business at $8.5bn

ADNOC will realize $850 million from the IPO of its fuel retail unit. (Reuters)
Updated 09 December 2017
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ADNOC share offering to value fuel retail business at $8.5bn

DUBAI: ADNOC Distribution, the retail and fuel-selling arm of Abu Dhabi’s state-owned oil company, will be valued at $8.5 billion — around the middle of a range of possible valuations — when trading opens on the Abu Dhabi Securities Exchange (ADX) next week.
The sale of 10 percent of the unit in an initial public offering (IPO) was oversubscribed “multiple” times by institutional investors, and 22 times to retail investors, who had their allocation doubled to 10 percent of the new shares on offer when the level of interest became apparent.
The IPO will be the first in the UAE capital’s stock market since 2011 and the biggest for a decade. It is also the first time a “book building” exercise — in which the issuer sets the price after testing investor demand across a range of valuations — has been used on the ADX.
The shares will be valued at 2.5 dirhams each, in the middle of a range running from 2.35 to 2.65 dirhams. Earlier expectations of a top level value of 2.95 dirhams and the sale of up to 20 percent of the unit were scaled back, but further share sales have not been ruled out by advisers.
Although the company did not specify the level of institutional oversubscription, people familiar with it said it was around three times the number of shares on offer across the total price range.
Some 60 percent of the new shares went to regional investing institutions, with 30 percent to global investors. It is believed most of the global tranche went to UK and US investors, with big domestic UAE interest from the regional element and some interest from Saudi investors.
Sultan Ahmed Al-Jaber, group chief executive officer of ADNOC, which will realize $850 million from the IPO, said: “This important and strategic offering represents a unique opportunity for investors to own a stake in the UAE’s number one fuel retail brand, and the largest network of retail convenience stores.
“The strong business model, unique market position and attractive growth prospects have garnered healthy and solid demand for the IPO, which has set a new benchmark for the UAE equity capital markets.
“ADNOC Distribution will continue to receive the full support and commitment of the group as it begins the next phase of its growth and transformation, as one of the UAE’s leading listed companies.”
ADNOC will use some of the proceeds from the listing to grow its petrol stations business outside Abu Dhabi, with sites already believed to be identified in neighboring Dubai. Its petrol forecourt shops form the largest retail chain in the country by number of shops.
It is also thought to be close to deals to expand in the Saudi Arabian petrol retail business, with partners believed to be already lined up for franchise deals in the Kingdom.
A successful IPO could encourage other big UAE companies to go for stock-market listings. Emirates Global Aluminium and the conglomerate Senaat are among those also believed to be considering listings.


Uber agrees to pay VAT in Egypt

Updated 18 February 2019
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Uber agrees to pay VAT in Egypt

  • Egypt introduced a law last May regulating ride-hailing apps Uber and Careem
  • Uber has said that Egypt is its largest market in the Middle East
CAIRO: Uber has agreed to pay value-added tax on its services in Egypt, Egyptian officials said on Monday, a move that may help resolve a long-simmering feud with traditional taxi drivers.
The agreement would also apply to other ride-hailing companies, the head of the Egyptian Tax Authority, Abdel Azeem Hussein, said. Egypt’s value-added tax (VAT) rate is 14 percent.
“Reaching an agreement and determining the tax treatment that will be applied to the company Uber and other companies operating in the same area will enhance confidence and cooperation between the authority and the tax community,” state news agency MENA quoted Hussein as saying.
Uber Egypt was not immediately available for comment.
Egypt introduced a law last May regulating ride-hailing apps Uber and Careem, after Egyptian taxi drivers filed a lawsuit arguing that the two companies were illegally using private cars as taxis and were registered as a call center and an Internet company, respectively.
An Egyptian court suspended Uber and Careem’s services in March last year after the taxi drivers’ suit but another court stayed the suspension ruling in April, allowing the companies to operate while the case was appealed to a higher court. A verdict is expected on Saturday.
Careem could not immediately be reached for comment on whether it will pay the VAT.
Uber riders and drivers in Egypt have said they faced various technical difficulties with the Uber app in recent weeks, which two security sources said was linked to data-sharing disputes with Egyptian authorities.
Uber has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services. It has been forced to quit several countries, including Denmark and Hungary.
Uber has said that Egypt is its largest market in the Middle East, with 157,000 drivers in 2017 and 4 million users since its launch there in 2014.