Adani’s family office to invest in Borouge’s IPO

UAE’s largest company is trying to generate $2 billion through this IPO of their joint venture. Gautam Adani’s family has pledged $75 million in the IPO, the subscription period of which is expected to end on May 28.

The IPO offer price for Borouge has been set at 2.45 dirhams per share. Moreover, according to a statement released by Abu Dhabi National Oil Co. on Monday. Adnoc and Borealis, based in Vienna, are selling 3 billion shares in Borouge, or 10% of the company. Which means the maker of specialized plastics for industries and consumer goods is worth slightly over $20 billion in stock.

The largest oil company in the United Arab Emirates and Borealis AG are attempting to generate $2 billion through an initial public offering of their chemicals joint venture in Abu Dhabi, which is expected to be the emirate’s largest-ever listing.

Seven key investors have committed to purchase $570 million worth of stock in the IPO. The family of India’s richest man, Gautam Adani, has pledged $75 million, while the Abu Dhabi wealth fund ADQ will invest $120 million and Alpha Dhabi Holding has pledged $100 million.

Despite market instability, the offer is the latest in a line of blockbuster listings from the UAE and neighboring Saudi Arabia. As oil and gas prices have risen in the aftermath of Russia’s invasion of Ukraine, the region’s IPO boom has gained traction. The UAE is OPEC’s third-largest oil producer.

Crude Price Surge

Crude oil prices have risen by roughly 50% this year. Also, bolstering local energy corporations’ efforts to list assets and promote the transition to a post-oil economy. Saudi Aramco is mulling an IPO of its trading arm this year. Which may be one of the biggest in the world, while Adnoc sold holdings in two units last year.

Dividends have been used by issuers to entice investors. Dividends to Borouge shareholders are estimated to total $975 million in fiscal year 2022. Thus, rising to at least $1.3 billion in fiscal year 2023. Holders will be paid in two instalments by Borouge. Before the IPO, Adnoc and Borealis will receive a $250 million one-time dividend.

The subscription period for UAE retail investors begins on May 23 and ends on May 28 for institutional investors. On June 3, Borouge is expected to begin trading.

Subscribe to our newsletter
Subscribe to our newsletter
Sign up here to get the latest news delivered directly to your inbox.
You can unsubscribe at any time