Adnoc to Sell Stake, Issue Bonds to Raise $1.64 Billion

Published May 27th, 2021 - 10:36 GMT
Adnoc to Sell Stake, Issue Bonds to Raise $1.64 Billion
Adnoc made it clear that the combined offering will not be available to the public in the UAE or any other jurisdiction. (Shutterstock)
Highlights
Adnoc made it clear that the combined offering will not be available to the public in the UAE or any other jurisdiction.
Abu Dhabi National Oil Company (Adnoc) together with its subsidiaries, the Adnoc Group, the current holder of 80 percent of the common shares in Adnoc Distribution, aims to raise $1.64 billion by selling its key stakes and also through issuing of bonds. 
 
The Abu Dhabi state oil company said it equates to three per cent of the registered share capital of Adnoc Distribution, through an accelerated bookbuild offering at an offer price of AED4.36 per share to certain eligible institutional investors in reliance on Rule 144A and Regulation S of the U.S. Securities Act of 1933, as amended (the US Securities Act).
 
Concurrently with the Share Offering, Adnoc proposes to issue approximately $1.195 billion senior unsecured bonds due in 2024 that are exchangeable into existing common shares of Adnoc Distribution, constituting approximately seven percent of the company’s registered share capital under certain conditions, under a private placement to certain eligible investors outside the US under Regulation S under the US Securities Act.
 
Adnoc made it clear that the combined offering will not be available to the public in the UAE or any other jurisdiction.
Together, the share offering and, assuming exchange and settlement in shares of all of the Exchangeable Bonds under their terms, the Exchangeable Bond Offering, represent a Combined Offering by Adnoc of approximately 10 per cent of the registered share capital of Adnoc Distribution.
 
The blended price of the Combined Offering of AED4.82 is approximately five percent above the three-month volume-weighted average share price of Adnoc Distribution.
 
The Exchangeable Bond Offering will have a maturity of three years and will be issued at an issue price of 100 percent with a coupon of 0.70 percent per annum, payable semi-annually as arrears in June and December each year. The exchange premium will be 15 percent above the reference price of Adnoc Distribution shares, resulting in an exchange price of AED5.01.
 
The transaction is the first combined equity and exchangeable bond offering in the GCC, once again highlighting Adnoc's novel approach to unlocking value from its assets.
 
The innovative deal structure and attractive form of financing provides Adnoc with greater access to a new and broader investor base, including those that are interested in an equity-linked bond investment.
 
The terms of the Exchangeable Bonds also provide an opportunity for the monetisation of Adnoc Distribution.
shares at a premium to the price of the Share Offering.

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