Adnoc Drilling to offer 7.5% stake in IPO

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The United Arab Emirates exports most of its crude oil to Asia.
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  • Adnoc retains the right to increase the size of the offering at any time before pricing of the IPO
  • It will continue to own a majority of Adnoc Drilling’s share capital after the IPO

The Abu Dhabi National Oil Company or Adnoc is planning to list 7.5 percent of the shares of its drilling unit on the Abu Dhabi Stock Exchange, said local reports on Monday, September 6.

Adnoc Drilling is the largest national drilling company in the Middle East by rig fleet size.

Its impending listing on the ADX through the IPO route is expected to generate considerable market activity, with the possibility that the shares could start trading as early as next month.

Apart from investors in the UAE and outside, Adnoc Group employees and its UAE National retirees can participate in the IPO, said the local reports.

Adnoc retains the right to increase the size of the offering at any time before pricing of the IPO, said the local reports.

Adnoc will continue to own a majority of Adnoc Drilling’s share capital after the IPO.

Baker Hughes Holding SPV Ltd, which holds 5 percent of Adnoc Drilling, will not be offering any shares for sale in the IPO.

The IPO is expected to let Adnoc sell part of its shareholding to better manage its assets.

The move is also expected to create new investment opportunities across Adnoc’s business.

This, in turn, will reportedly allow it to increase trading liquidity for the shares and raise its profile with the international investors.

Adnoc Drilling operates 107 rigs, of which 96 rigs are owned and 11 rigs are rented.

It is the sole provider of drilling rig hire services and certain associated rig-related services to the Adnoc Group.

In 2020, it had revenues of $2.09 billion and profit of $569 million. For the six months ended June 30, 2021, revenues were $1.12 billion.

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