Adnoc announces offer price for Borouge IPO

Abu Dhabi National Oil Company (Adnoc), together with its long-standing partner Borealis AG, on Monday announced the offer price for the initial public offering (IPO) of Borouge plc, their petrochemicals joint venture, on the Abu Dhabi Securities Exchange (ADX).

The Price Per Share for the Offering has been set at Dhs2.45, implying an equity value of Dhs73.6 billion ($20 billion), making the Borouge IPO the largest-ever listing to date in Abu Dhabi’s history.

The Offer Price was determined by Adnoc and Borealis (Selling Shareholders) following investor engagement that saw significant strong initial demand indications from both local and international investors ahead of the start of the subscription period today.

The Selling Shareholders and Borouge entered into cornerstone investment agreements with International Holding Company, Multiply Group, Alpha Dhabi Holding, ADQ, Abu Dhabi Pension Fund, Emirates Investment Authority, and the Adani Family (the Cornerstone Investors).

These high-quality Cornerstone Investors have, either directly or indirectly, made a combined commitment of approximately Dhs2.1 billion ($570 million) to the IPO, subject to a minimum six month lock-up period.

Borouge has a robust financial profile, with full-year revenue of $5.5 billion in 2021 and profit for the year of $1.5 billion for its ADP business only, with a very strong cash flow generation record that supports its capacity to pay highly competitive future dividends. For 2022, the Company expects to pay $975 million in dividends to shareholders. In 2023, Borouge expects to pay no less than $1.3 billion for the full-year period, equivalent to a dividend yield of 6.5% based on the price per share announced for the offering.

The Selling Shareholders believe the offer price per share provides investors with a highly attractive value proposition that reflects their long-term confidence in Borouge’s growth trajectory. This decision also reflects Adnoc’s prioritisation of a supportive aftermarket performance post-listing and robust dividend policy.

Through the Borouge IPO, Adnoc is offering investors another highly compelling investment opportunity to invest alongside Adnoc in a company that is set to play a vital role in sustainable growth for Abu Dhabi and the UAE.

Borouge, established in 1998, combines the strength and experience of Adnoc and Borealis, through Borouge ADP, its Operations joint venture, headquartered in Abu Dhabi and Borouge PTE, its Sales and Marketing joint venture, headquartered in Singapore. Today, Borouge is one of the world’s leading providers of innovative and differentiated polyolefin solutions for the agriculture, infrastructure, energy, advanced packaging, mobility and healthcare industries. The Company employs over 3,100 people and serves customers in more than 50 countries across Asia, the Middle East and Africa.

The Borouge portfolio of products comprises polyethylene and polypropylene, the two most common types of polymers, which are used for a variety of applications such as sustainable packaging, pipes and fittings, wires, cables automotive and medical applications. Borouge’s polymer solutions are categorised in two main product segments: consumer solutions and infrastructure solutions.

Consumer solutions include sustainable packaging, medical containers and greenhouse films, while infrastructure solutions include water and gas pipes and cables for power transmission.

Central to Borouge’s growth strategy will be the continued growth of its product portfolio through innovation, sustainable solutions, new product development and strategic market and geographic expansion. The Company will focus on offering its differentiated product offering and industry-leading innovation capabilities to premium pricing end-markets, including access to and use of Borealis’ Borstar technology, enabling Borouge to offer tailored solutions for demanding end-use applications integral to everyday life.

Borouge will also benefit from Adnoc’s recent equity investment in Borealis, which further expands Adnoc’s long-standing partnership with Borealis while accelerating the delivery of Adnoc’s broader Downstream and Industrial growth programme. Adnoc is well-positioned to capitalise on growth opportunities in the chemicals and petrochemical sector globally, building on its world-class refining and petrochemicals facilities in Al Ruwais Industrial City, Abu Dhabi.

Adnoc has already embarked on a major expansion drive in this space, including the recently announced Borouge 4 complex and the TA’ZIZ Industrial Chemicals Zone in Ruwais.

WAM