Adnoc seeks $14bn value for IPO of service station unit

12 July 2017

The state-controlled oil and gas firm is planning to appoint financial advisors on the deal soon

Abu Dhabi National Oil Company (Adnoc) is considering the option of selling shares in its service stations unit through an initial public offering (IPO) and expects a market valuation as high as $14bn.

Adnoc may appoint investment banks as early as end of third week of July to work on the deal, according to media reports. The public float is most likely to take place on the Abu Dhabi Securities Exchange (ADX).

The unit may ultimately fetch a value of about $10bn and raise up to $3bn from a listing, but Adnoc has yet to take a final decision and it may decide not to pursue the IPO plans.

Adnoc, on 10 July, said that it will open up some of its assets to partnerships with international companies and it is considering plans for selling minority stakes in the some of its service businesses, a move aimed at supporting the expansion of private sector participation in its operations.

The oil and gas company will also seek to expand its energy trading operations as part of the new plan, Abdulla Salem al-Dhaheri, head of Adnoc’s marketing, sales and trading directorate, said at a conference in Istanbul this week.

Adnoc’s distribution business spans more than 300 gas stations across the UAE, as well as a network of convenience stores and auto products, such as lubricants.

State-controlled Adnoc is the second UAE company, after Emaar Properties, to publically announce significant equity market transactions this year. The IPO market, across the region, is once again showing signs of life as governments in the GCC look to raise funds through selling stakes in some of the state enterprises to offset the impact of dwindling oil revenues. Saudi Arabia, the region’s largest economy and world’s biggest oil producer, plans to float less than 5 per cent stake in state oil company Saudi Aramco, which has been billed as potentially the largest-ever IPO, with expected proceeds of $100bn. Oman, which is not a member of Opec, has also indicated it is preparing to float some of its oil and gas assets. 

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