ADNOC IPO could raise $750m as one of UAE's largest ever offerings

ADNOC IPO could raise $750m as one of UAE's largest ever offerings
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Updated 06 September 2021

ADNOC IPO could raise $750m as one of UAE's largest ever offerings

ADNOC IPO could raise $750m as one of UAE's largest ever offerings
  • The company will offer at least 7.5 percent of Adnoc Drilling, which could value the business at up to $10 billion
  • Given the valuation, a sale of that size could raise about $750 million

DUBAI: The Abu Dhabi National Oil Co., the UAE energy company, is to spin off a chunk of its drilling business in an initial public offering that underlines the Emirates’ commitment to long term oil growth.
ADNOC said it will sell 7.5 percent of its shares in ADNOC Drilling in an offering on the Abu Dhabi Securities Exchange. On recent valuations, the share sale would be around $750 million.

Coming after the flotation of ADNOC’s distribution arm in 2017, the drilling unit’s IPO will be the second big divestment from the corporate parent.
Sultan Al-Jaber, ADNOC managing director and chief executive, said: “This offering marks another significant milestone in ADNOC’s ongoing journey in unlocking and maximizing value across our integrated asset base.”

National oil companies in the region, including the largest Saudi Aramco, have been looking at ways of maximizing the value of their energy assets.
Al-Jaber added: “ADNOC Drilling’s planned value creation opportunities, including a major rig fleet expansion and well drilling program, ideally position the company to take full advantage of emerging opportunities across the upstream value chain.”

 

Read more: ADNOC, Reliance to build raw chemicals plant in Abu Dhabi


ADNOC said it would retain its holding in the drilling business after the share sale, expected next month. US oil services company Baker Hughes also has a 5 percent holding in the drilling business which it will retain.
No value has yet been put on the business, which was valued at $10 billion two years ago when Baker Hughes first bought shares in return for oil services cooperation. The price of shares on offer will be set later, after a bookbuilding roadshow run by advising banks.
One source close to the process said: “It will be competitive.”
The shares will be on offer to UAE institutions and retail investors, as well as international investors.
In line with this strategy, the UAE has argued forcefully for higher production levels within the OPEC+ alliance of producers led by Saudi Arabia and Russia.
ADNOC said one rationale for the IPO was to “capitalize on plans to increase crude oil production capacity to 5 million barrels per day and produce 1 billion cubic feet per day of unconventional gas by 2030.”

The share offering comes amid some western investor resistance to fossil-fuel investment, but international investors are expected to be drawn to the steady cash flow of the business and its strong dividend policy.
ADNOC said it achieved profit margins of 50 percent in the three years to 2020 and “robust” net cash from operating activities of more than $1 billion in the same period. The IPO carries a commitment to pay an annualized dividend of $650 million and to increase this by 5 per cent per year until 2026.
Nasser Saidi, a regional economics and markets expert, told Arab News: “The plans to float part of the drilling unit is just part of the current trend of privatizing some of their fossil fuel assets.
“Listing like these and future privatization of fossil fuel assets using the capital markets could massively increase the size and transform the UAE’s markets into a global centre for energy and its financing.”


Money manager deVere doubles ESG investment target to $2bn in five-year plan

Money manager deVere doubles ESG investment target to $2bn in five-year plan
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Updated 7 sec ago

Money manager deVere doubles ESG investment target to $2bn in five-year plan

Money manager deVere doubles ESG investment target to $2bn in five-year plan
  • The doubling of the pledge comes as world leaders, industry chiefs and experts head to Glasgow this weekend for the start of COP26

Global money manager deVere Group has doubled its target of environmental, social and governance (ESG) investments to $2bn, less than a year after setting its original goal.

The multi-national financial advisory, asset management and fintech organisation, deVere Group had said in January it would aim to have $1bn in socially responsible investment vehicles within five years.

It now says it plans to hit is “$2bn or more” within the same time frame.

The doubling of the pledge comes as world leaders, industry chiefs and experts head to Glasgow this weekend for the start of COP26, an event seen as a critical turning point in the struggle to avert the worst effects of climate change.

CEO and founder of deVere, Nigel Green, said: “Climate change – and the major, far-reaching fallout of it for economies and communities around the world - is the greatest risk multiplier. There’s no question that it is the defining issue of our time.

“But this takes unprecedented levels of investment, which is why deVere is now aiming to position $2bn into ESG investments within five years.”

Green added that the new target is achievable as investors, keen to get ahead of the curve “as well as earn profits with purpose”, are receptive to the opportunities as the world scrabbles to mitigate the environmental, economic and social fallout of the current situation – “a situation which is likely to be a constant risk.”

The investment house says it has over $10 billion under management with over 80,000 clients in more than 100 countries.

The group is also one of 18 founding signatories of the UN-backed Net Zero initiative, the international alliance of global finance companies that aim to help accelerate the transition to a net zero financial system.

Its membership means it is committed to “aligning all relevant products and services to achieve net zero greenhouse gases by 2050 and to set meaningful interim targets for 2025,” a statement from the company said.


Clean energy development can't be left to Aracmo and ADNOC, warns Saudi minister

Clean energy development can't be left to Aracmo and ADNOC, warns Saudi minister
Updated 7 min 4 sec ago

Clean energy development can't be left to Aracmo and ADNOC, warns Saudi minister

Clean energy development can't be left to Aracmo and ADNOC, warns Saudi minister

RIYADH: Middle Eastern oil companies cannot be the only ones to invest in the transition to clean energy, a leading Saudi Arabia minister has said.

Speaking at the Future Investment Initiative Forum in Riyadh, minister of investment Khalid Al Falih called for more money to be spent to ensure a “balanced energy portfolio”.

He said: “Saudi Aracmo and ADNOC and others need to invest in the transition, (but) if we leave them in the corner to pay all of the capital for fossil fuel, we are depriving them and the region from investing in a more balanced energy portfolio.”

The UK’s minister of investment, Lord Gerry Grimstone, said he expected to see closer working between governments and the private sector.

“Over the next few years we will see the most private public partnerships we have ever seen,” he said, adding: “The partnership between the public and private sectors in the world has deepened during the pandemic, and we hope to double it in the future.”


Saudi-Swiss investment to hit $3.2 billion by 2030

Saudi-Swiss investment to hit $3.2 billion by 2030
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Updated 11 min 1 sec ago

Saudi-Swiss investment to hit $3.2 billion by 2030

Saudi-Swiss investment to hit $3.2 billion by 2030
  • Khalid Al-Falih said the country’s plan is to make Saudi Arabia the most important export destination for Swiss companies

The newly-formed Saudi-Swiss Investment Forum, which will support investment in both countries, aims to hit SR12 trillion ($3.2bn) of financing by 2030, the Saudi Press Agency reported.

The body, launched on 25 October in Riyadh, will also back Swiss companies who want to invest in the Kingdom.

Minister of investment Khalid Al-Falih said the country’s plan is to make Saudi Arabia the most important export destination for Swiss companies.

Mr Al-Falih added that Kingdom’s investment strategy has several key aims it plans to reach by 2030, including doubling annual domestic investment to 9 percent of gross domestic product and boosting foreign direct investment by 20 times to 5.7 percent of GDP.


Dollars and gold over bitcoin, leading investors tell the Future Investment Initiative Forum

Dollars and gold over bitcoin, leading investors tell the Future Investment Initiative Forum
Updated 58 min 41 sec ago

Dollars and gold over bitcoin, leading investors tell the Future Investment Initiative Forum

Dollars and gold over bitcoin, leading investors tell the Future Investment Initiative Forum

Leading investors still see gold and dollars as a safer haven for investments over bitcoin, according to prominent business people speaking at the Future Investment Initiative Forum in Riyadh.

Both Larry Fink, head of asset management company BlackRock, and David Solomon, chairman of the Goldman Sachs Group, both said they preferred investments in dollars over bitcoin when asked.

Ray Dalio, founder and co-chairman of Bridgewater Associates, opted for gold over bitcoin.

Khaldoon Khalifa Al Mubarak, CEO of the UAE’s Mubadala Investment Company, replied that he would take bitcoin “hedged in gold”.


Spain plans to ask to exit EU common electricity price policy

Spain plans to ask to exit EU common electricity price policy
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Updated 26 October 2021

Spain plans to ask to exit EU common electricity price policy

Spain plans to ask to exit EU common electricity price policy
  • Facing spiralling electricity prices, partly triggered by more expensive natural gas

The Spanish government plans to ask the European Union for permission to exit the common electricity price policy and establish its own pricing mechanism, El Pais newspaper reported on Tuesday, citing an internal government document.


The document has been shared in Spain, hours before EU energy ministers are due to meet in Luxembourg to discuss electricity prices, the newspaper said.


Facing spiralling electricity prices, partly triggered by more expensive natural gas, the Spanish government has passed tax breaks, a claw-back of electricity utilities' profits and pushed for EU-wide measures such as joint natural gas purchases.

Earlier, Spain's Secretary of State for Energy said the EU electricity market must be reformed and EU countries should have the option to buy gas collectively, among other measures to tackle record-high power prices.

EU commissioner Thierry Breton said on a French radio station on Tuesday that he was not sure joint purchases as suggested by Spain would be effective, and was echoed by Luxembourg's energy minister Claude Turmes who said the proposal for EU countries to jointly buy gas would not offer a solution to the recent spike in energy prices.

Separately, French Finance Minister Bruno Le Maire told a Paris conference on Tuesday that the European energy market needs reforming, as European countries battle with rising energy prices.


Divisions have deepened among European Union countries ahead of an emergency meeting of ministers on Tuesday on their response to a spike in energy prices, with some countries seeking a regulatory overhaul and others firmly opposed.


Countries are struggling to agree, however, on a longer term plan to cushion against fossil-fuel price swings, which Spain, France, the Czech Republic and Greece say warrant a bigger shake-up of the way EU energy markets work.

 

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