The Abu Dhabi National Oil Company (ADNOC) announced on Thursday that it completed a placement of 880 million shares in ADNOC Drilling worth $935 million to institutional investors. The 880 million shares make up 5.5 percent of ADNOC Drilling’s total issued and outstanding share capital. This will increase the company’s free float to 16.5 percent.
Strong demand
The ADNOC Drilling offering witnessed strong demand from institutional investors across the region and globally. The company priced the share at AED3.90, around 70 percent higher than the initial public offering (IPO) price of AED2.30 per share, and represents a 5.6 percent discount to the company’s closing price on May 22, 2024. The market now expects the settlement of the offering the occur on May 28, 2024.
“The significant interest our offering generated from both domestic and international investors is a testament to ADNOC Drilling’s growth trajectory since its IPO and its exciting future growth potential,” stated Khaled Al Zaabi, group CFO of ADNOC.
ADNOC Drilling’s growth potential
The oil company continues to see a strong and unique growth potential in ADNOC Drilling, which was evident in the company’s Q1 financial results. Hence, the company saw record-strong revenue and earnings, greater dividend distribution, and transformational progress.
ADNOC will retain the majority (78.5 percent) of ADNOC Drilling and has restricted selling more shares for the six months following the closing of the offering, subject to customary carve-outs.
“ADNOC looks forward to its continued support of ADNOC Drilling, which is central to ADNOC’s strategic growth initiatives and its role as a key catalyst and critical enabler of the Abu Dhabi financial market,” added Al Zaabi.
Read: ADX launches Global Investor Roadshow in New York, showcases leading companies
MSCI Emerging Market Index
In addition, ADNOC expects the higher free float to pave the way for the company towards inclusion in the Morgan Stanley Capital International (MSCI) Emerging Market Index. This may take place in the company’s next quarterly review if it meets all the relevant inclusion criteria. This inclusion will further contribute to the company’s diversification of its investor base and significantly broaden awareness of its unique value proposition.
For more news on markets, click here.
