Abu Dhabi energy giant ADNOC seeks near $1 billion in logistics unit IPO

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Abu Dhabi’s main energy company is seeking to raise about $1 billion from the initial public offering of its shipping and logistics unit, according to people familiar with the matter.

Abu Dhabi National Oil Co., which listed its gas business last month, has added banks EFG Hermes, Credit Agricole SA, Societe Generale SA, Arqaam Capital Ltd., Abu Dhabi Commercial Bank PJSC and International Securities as joint bookrunners on the potential IPO of ADNOC Logistics & Services, the people said, asking not to be identified as the information isn’t public.

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HSBC Holdings Plc has been added as a joint global coordinator alongside Citigroup Inc., First Abu Dhabi Bank PJSC and JPMorgan Chase & Co, they added.

ADNOC Logistics has held initial meetings with investors and plans to launch the IPO as soon as May, the people said.

The planned IPO of ADNOC Logistics would come shortly after the Abu Dhabi energy giant raised $2.5 billion from a flotation of its gas business, currently the world’s biggest IPO of 2023.

In that operation, state-owned ADNOC sold a 5 percent stake in the company, valuing it at about $50 billion.

Details of the ADNOC Logistics offering, such as size and timeline, are still under discussion and could change, the people said.

International Securities confirmed it had been selected as a joint bookrunner. Representatives for ADNOC and banks including HSBC, EFG Hermes, Credit Agricole, Societe Generale, Arqaam Capital and Abu Dhabi Commercial Bank declined to comment.

Driving force

ADNOC Gas’s share sale drew over $124 billion in investor orders and has risen about 28 percent from its offer price, underscoring continued high demand for offerings in the Middle East.

While IPOs are extending their slump this year as equity market volatility and uncertainty over the path of interest rates prevent the window from reopening fully, the Arabian Gulf has remained busy.

Last year it accounted for half of the IPO proceeds in all of Europe, the Middle East and Africa, as high oil prices and equity inflows underpinned a listings boom.

ADNOC Logistics — which has more than 200 vessels transporting crude oil, refined products, dry bulk, containerized cargo, liquefied petroleum gas and LNG — has been expanding its fleet to cope with increased demand from growth in the state-owned firm’s upstream and downstream businesses.

It recently signed a five-year contract with ADNOC Offshore to provide integrated logistics services including the provision of port services, warehouse operations, heavy lifting, material handling and shipping, rig and barge moves, marine terminal operations and waste management services.

Spate of listings

ADNOC has been selling stakes in several of its units in recent years as the United Arab Emirates and Saudi Arabia lead a regional drive to fund the diversification of their energy-reliant economies and open up their markets to international investors.

Aside from ADNOC Gas, the state-owned company has listed chemicals firm Borouge, ADNOC Drilling, fertilizer firm Fertiglobe and its fuel-retailing unit ADNOC Distribution.

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