Abu Dhabi National Oil Co. plans to sell bonds and shares of its fuel retailer unit for a total of $1.64 billion as the UAE's biggest energy company continues to monetize its assets to spend on other projects, including oil output capacity boost.
ADNOC, which has an 80% stake in ADNOC Distribution, plans to offer 3% of the unit to certain eligible institutional investors and at the same time issue $1.195 billion in bonds exchangeable for existing common shares in the fuel retailer that are equivalent to a 7% stake, it said in a statement May 26.
The two transactions will reduce ADNOC's shareholding in the fuel retailer unit to 70% and will enable it "to unlock significant value from its assets," Sultan al-Jaber, ADNOC CEO, said in the statement.
Since 2019, ADNOC has been monetizing its oil and gas assets as it seeks to unlock cash to fund strategic projects, which include increasing oil output capacity to 5 million b/d by 2030, from above 4 million b/d currently. ADNOC plans to spend around $122 billion between 2021 and 2025 on growth projects, including the capacity ramp-up.
ADNOC raised $1 billion from the institutional placement of 10% of shares of ADNOC Distribution in September. ADNOC floated a 10% stake in the fuel retailer in 2017, its first initial public offering of a unit.
Pipeline deals
Also in September, ADNOC inked a $5.5 billion deal for its real estate assets with a consortium of investors led by Apollo Global Management, which acquired a 49% stake in ADNOC unit, Abu Dhabi Property Leasing Holding Co., with ADNOC retaining a 51% stake.
In June, ADNOC signed a deal worth more than $10 billion with a group of investors to sell a 49% stake in its gas pipelines.
A consortium grouping Global Infrastructure Partners, or GIP, Brookfield Asset Management, Singapore's sovereign wealth fund GIC, Ontario Teachers' Pension Plan Board, South Korea's NH Investment & Securities and Italy's Snam will invest in select ADNOC gas pipeline assets valued at $20.7 billion, ADNOC said in a statement on June 23.
The consortium will collectively hold a 49% stake in ADNOC Gas Pipelines, a newly-formed ADNOC unit, with the parent company holding the remaining interest.
In 2019, ADNOC clinched a $5 billion deal with a consortium that includes GIC, BlackRock Inc., KKR & Co and Abu Dhabi Retirement Pensions and Benefits Fund, to sell them select pipeline infrastructure and let them collectively hold a 49% stake in ADNOC Oil Pipelines, a subsidiary of the parent company.
ADNOC Oil Pipelines will lease the national oil company's interest in 18 pipelines and give rights to transport crude and condensates from the company's onshore and offshore concessions over 23 years.
The transaction was the first midstream partnership between institutional investors and a Middle East national oil company.
