The Abu Dhabi National Oil Company (ADNOC) and its Austrian chemicals partner (Borealis) are planning an initial public offering (IPO) for their Borouge Petrochemicals joint venture.
Borouge, a plastics company, today announced plans to float a minority stake and list the company on the Abu Dhabi Securities Exchange by June 3, 2022.
Borouge explained that the offering will consist of approximately 3 billion outstanding shares, representing 10% of the company’s issued share capital.
In the offering document, it added that the subscription in “Borouge” shares will start on May 23, and continue until May 28 for individual investors, and until May 30 for institutional investors.
According to the IPO plan, which is still awaiting regulatory approval, ADNOC will own 54 percent of the company, while the remaining 36 percent will go to Borealis. The sale is expected to value Borouge at $20 billion.
ADNOC owns Borouge, along with Borealis, which is itself owned by Austrian refiner OMV AG and Abu Dhabi’s Mubadala Investment Company.
Founded in the late 1990s, Borouge manufactures plastics used in everything from automobiles and food packaging to drug vials and piping systems. The company’s main factory is located in Abu Dhabi and employs more than 3,000 people and serves clients throughout the Middle East, Africa and Asia.
Dividend distribution twice a year
The Company intends to pay dividends twice every fiscal year after the IPO. The company is expected to pay an initial dividend of $325 million in September 2022 while another $650 million will be distributed to shareholders in March 2023, or a total of $975 million for the 2022 fiscal year.
According to the statement, the company intends to pay a dividend for the fiscal year 2023 of not less than $1.3 billion.
Earlier, the “ADNOC Group” successfully listed some of its companies and joint businesses such as “ADNOC Distribution”, “ADNOC Drilling” and “Fertiglobe” in the Abu Dhabi Securities Exchange. It raised $1.1 billion by listing ADNOC Drilling and $795 million by selling shares in its Fertiglobe unit.
In April, the Dubai Electricity and Water Authority raised $6.1 billion in the world’s second largest IPO this year.
Subscriptions are open to all
Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, ADNOC Managing Director and Group CEO, said that Borouge will be open to all citizens and residents of the country.
Al Jaber said: “With our long-term partner, Borealis, I am pleased to announce our intention to offer a minority stake in Borouge, our petrochemical joint venture, on the Abu Dhabi Securities Exchange.”
Al Jaber said that ADNOC continues to unleash and continuously maximize value across its integrated upstream and downstream asset base in order to drive sustainable growth for the benefit of Abu Dhabi and the UAE.
“This latest offer will be open to all citizens and residents of the UAE in addition to qualified international and local institutional investors,” the minister said.
“With Borouge and our recently announced equity investment of 25% in Borealis, ADNOC is poised to benefit from significant industrial growth consumer-led in the petrochemical sector over the coming decades. Today’s proposed listing, our fourth to come to market, is another milestone in our highly successful value creation and strategic growth journey,” said Al Jaber.
Borealis CEO Thomas Gangl said, “Borealis is excited to bring a minority stake in Borouge to the market, demonstrating the value Borouge represents to the markets and customers it serves.”
He added, “For more than 25 years, Borouge has evolved into a leader in this sector through the strong partnership between ADNOC and Borealis. Borouge provides solutions for the community and aims to accelerate the growth journey towards a sustainable and circular future.”
A promising business outlook
Hazeem Sultan Al Suwaidi, CEO of Borouge, said, “Borouge has grown to become one of the world’s leading petrochemical companies innovating polyolefin solutions since its inception in 1998, with the support of our shareholders, ADNOC and Borealis.”
Al Suwaidi added: “Our success has been built on the dedication and expertise of our employees and we look forward to welcoming new shareholders to be a part of Borouge’s growth as we seek to list our shares on the Abu Dhabi Securities Exchange.”