Adnoc reportedly close to hiring JPMorgan, FAB for IPOwritten by Bella Palmer
When Baker Hughes bought a 5% stake in Adnoc Drilling in 2018, that deal valued the company at about US$11bil
Abu Dhabi National Oil Co (Adnoc) is close to hiring JPMorgan Chase & Co and First Abu Dhabi Bank PJSC to help arrange the potential listing of its drilling business, according to people familiar with the matter.
Adnoc is looking to sell a minority stake in its drilling unit in a deal that could value the business at up to US$10bil, the people said, declining to be named because the matter is private.
In 2018, when Baker Hughes bought a 5% stake in Adnoc Drilling, that deal valued the company at about US$11bil, including US$1bil of debt.
Although the state energy firm has yet to award formal mandates, the two banks are in pole position for a role on the IPO at the Abu Dhabi Securities Exchange, the people said. Adnoc may also appoint additional advisers, they said.
Adnoc and JPMorgan declined to comment.
Alongside tapping new revenue sources, Abu Dhabi is looking to revive its dormant stock market by bringing in local or international investors.
Government entities such as Adnoc, Mubadala Investment Co and ADQ have also been exploring different ways to raise cash for their owner.
Adnoc and chemical producer OCI NV have started preparing for a potential IPO in Abu Dhabi of their fertiliser joint venture called Fertiglobe, while wealth fund Mubadala hired advisers for the listing of satellite operator Yahsat.
Abu Dhabi is the capital of the United Arab Emirates and holds most of the country’s crude deposits. The UAE is the third biggest producer in the Organisation of Petroleum Exporting Countries (OPEC), behind Saudi Arabia and Iraq.
International and local funds have invested over US$20bil in Adnoc assets such as pipelines and property in recent years. Last June, the company sold leasing rights over natural-gas pipelines to a consortium including Global Infrastructure Partners and Brookfield Asset Management Inc, in a deal worth US$10.1bil.
Still, its sole IPO to date was the listing of its fuel-retailing unit, Abu Dhabi National Oil Co for Distribution PJSC, in 2017.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.