Fertiglobe Plc, a UAE-based fertiliser joint venture of Abu Dhabi National Oil Company (ADNOC) and Egyptian billionaire Nassef Sawiris-led OCI NV, is targeting a valuation of $5.5-6 billion via its initial public offering (IPO).
The company has set the IPO price range between AED2.45 and AED2.65 ($0.66 to $0.72) per share. This pegs the IPO size between $765 million and $827 million.
Fertiglobe has also inked cornerstone investment pacts with US-based Inclusive Capital Partners, Abu Dhabi Pension Fund and Singapore sovereign wealth fund GIC, which will together put in $231 million.
Jeffrey Uben, founder and managing partner of Inclusive Capital, will join Fertiglobe’s board as part of the deal.
ADNOC and OCI are selling a total of 1.145 billion shares in the IPO, equivalent to a 13.8% stake. Fertiglobe itself isn’t issuing any new shares, so won’t get any proceeds from the IPO.
The IPO, announced on October 5, opened for subscription on Wednesday. Retail investors can bid till October 18 and institutional investors until October 19. The final offer price will be announced on October 20, and the company will begin trading on the Abu Dhabi Securities Exchange (ADX) a week later.
After the IPO, OCI will continue to own a majority stake in the company while ADNOC’s ownership will come down to 36.2%. Amsterdam-listed OCI currently holds a 58% stake in Fertiglobe while ADNOC owns 42%.
The IPO is open to individuals and other investors in the UAE as part of a retail offering and to qualified institutional and other investors as part of the qualified investor offering.
Fertiglobe is one of the world’s biggest seaborne exporters of urea and ammonia combined. It also produces clean ammonia. In June this year, it joined a project by ADNOC and Abu Dhabi sovereign wealth fund ADQ to develop a blue ammonia facility in Ruwais, Abu Dhabi with a capacity of one million tonnes a year.
The fertiliser company generated cash flow from operations of $520.8 million and $482 million, respectively, for the year through December 2020 and for the six months ended June 30, 2021. It recorded adjusted EBITDA margins of 29.2% and 37.6%, respectively, for 2020 and for the six months through June 2021.
The IPO is the third such sale of stake by ADNOC in one of its associate companies and subsidiaries, and is part of a strategic process by the energy giant to offload its non-core assets. Last month, ADNOC raised $1.1 billion from an IPO of unit ADNOC Drilling. In 2017, it had raised $851 million selling a 10% stake in ADNOC Distribution.