Strong interest as UAE oil giant lists retail arm

ADNOC Distribution is the sole retail fuel operator in Abu Dhabi and Sharjah. (Reuters)
Updated 14 December 2017
0

Strong interest as UAE oil giant lists retail arm

ABU DHABI: Investor interest was strong Wednesday as Abu Dhabi’s state energy company listed a stake in its retail distribution arm, the first time the emirate has sold shares in one of its oil firms.
The Abu Dhabi National Oil Company said it had raised $845 million by floating 10 percent of its subsidiary ADNOC Distribution, a landmark share offering as Gulf energy firms open up to outside investments.
The initial public offering price for the shares was at 2.5 dirhams (68 US cents) and by 9:15 a.m. GMT they were trading at 73 cents.
ADNOC said the IPO brought the subsidiary’s market capitalization to $8.5 billion, making it the fourth-largest firm on the Abu Dhabi Securities Exchange.
The statement said the IPO was oversubscribed several times and that 90 percent of the shares were sold to institutional investors, a third of them international, and the rest to individual investors.
Abu Dhabi, the UAE capital which holds more than 90 percent of the country’s 98 billion barrels of crude reserves, has never before offered public shares in one of its oil companies.
Hit hard by the sharp drop in oil prices, energy-dependent Gulf states have resorted to a string of reforms including hiking fuel and power prices, imposing taxes and selling off part of their strategic assets to raise funds.
Neighboring oil kingpin Saudi Arabia is planning to eventually float up to 5 percent of its national oil company Aramco, in what many expect would be the biggest IPO in history.
With 360 fuel stations and more than 235 stores, ADNOC Distribution is the UAE’s largest operator of petrol stations and the sole retail fuel operator in the emirates of Abu Dhabi and Sharjah.
“We were extremely pleased with the demand for this landmark IPO. We received substantial interest from the international investment community, as well as an overwhelming response from investors in the UAE,” ADNOC CEO Sultan Al-Jaber said in the statement.
Established in 1973, ADNOC Distribution posted net profits of $485 million in 2016.
ADNOC has recently renewed concession rights and offered new joint ventures to a number of international oil companies as it bids to raise UAE output to 3.5 million barrels per day next year, from the current 3.2 million bpd.
 


Egyptian firms to build $3bn power plant on Tanzanian world heritage site

Updated 30 min 41 sec ago
0

Egyptian firms to build $3bn power plant on Tanzanian world heritage site

  • Arab Contractors and El Sewedy to build plant
  • Plan triggers protests from environmentalists

DAR ES SALAAM: Tanzania has signed a deal with Egypt’s El Sewedy Electric and Arab Contractors to build a $3 billion hydroelectric plant on a World Heritage site in the country, that will more than double Tanzania’s power generation capacity.
The project has faced opposition from conservationists, who say the construction of a dam on a river that runs through the Tanzania’s Selous Game Reserve, known for its elephants, black rhinos and giraffes, as well as many other species, could affect the wildlife and their habitats.
Energy Minister Medard Kalemani, said in comments broadcast on state television on Wednesday that the plant would have an installed capacity of 2,115 megawatts, calling it “a very huge dam project.”
Representatives of state-run Tanzania Electric Supply Co, El Sewedy and Arab Contractors signed the agreement in the presence of President John Magufuli and Egyptian Prime Minister Mostafa Madbouly, TV broadcasts showed.
Magufuli said the project will be wholly funded from taxes. Monthly tax revenue collection has increased from 850 billion shillings ($370.37 million) per month before he came to power in late 2015, to an average of 1.3 trillion shillings ($566.45 million)under his administration, he said.
“When we asked for financing for this project, the lenders refused to give us money but thanks to improved tax collection, we are able to finance this project using our own resources,” he said.
Arab Contractors will have a 55 percent stake in the project and El Sewedy 45 percent, El Sewedy said on Tuesday.
El Sewedy said the Egyptian stock market had halted trading of its shares pending details on the deal it had signed.
Covering 50,000 square kilometers, the Selous Game Reserve is one of the largest protected areas in Africa, according to UNESCO.
The World Wildlife Fund conservation group said in a report in July last year the proposed hydropower dam “puts protected areas of global importance, as well as the livelihoods of over 200,000 people who depend upon the environment, at risk.”
Officials at the WWF Tanzania office were not immediately available to comment on Wednesday’s deal.
Magufuli dispelled the environmental concerns, saying Tanzania had allocated 32.5 percent of its total land mass to conservation.
“The dam will become a major source of water and the cheap electricity to be produced from the dam will reduce the number of people who cut trees for firewood,” he said.
Magufuli, nicknamed “the bulldozer,” for his forceful leadership style, has in the past pushed for the project to start as quickly as possible to speed up development.
He has introduced anti-corruption measures and tough economic reforms and pushed for swift completion of big infrastructure projects including roads, railways and airports.