OCI NV, Amsterdam, and Abu Dhabi National Oil Co.(ADNOC) plan to raise between $765-$827 million through the listing of their Middle Eastern fertilizer joint venture, Fertiglobe.
The companies have set a price range of between AED2.45-2.65 per share for Fertiglobe’s listing, implying a total valuation of between $5.5 billion to $6 billion, OCI said in an Oct. 11 statement. The offering will include about 1.15 billion shares – or, as previously announced, 13.8 percent of the joint-venture company.
The final price offer is expected to be announced on Oct. 20, and admission of the shares to trading on the Abu Dhabi bourse on Oct. 27.
Inclusive Capital Partners LP, Singapore’s sovereign wealth fund GIC Pte., and Abu Dhabi Pension Fund have committed a combined investment of about $231 million, entering into cornerstone investment agreements on Oct. 12 in the IPO.
U.S. activist investor and Inclusive Capital Partners’ Founder and Managing Partner Jeff Urban will join Fertiglobe as an independent board member after the listing, OCI said.
The IPO could benefit from the rebound in global fertilizers prices over the past 12 months, as well as Fertiglobe’s advantage of locked-in cheap gas supplies, as soaring natural gas prices in Europe have forced some fertilizer companies to curtail ammonia output in recent weeks (GM Oct. 8, p. 1).
OCI and ADNOC announced their decision early this month to proceed with the IPO and listing. OCI intends to indirectly continue own more than 50 percent of Fertiglobe’s share capital post IPO, while ADNOC is expected to indirectly own at least 36.2 percent post IPO. OCI currently owns a 58 percent stake, while ADNOC has a 42 percent holding.
Fertiglobe this week increased its dividend guidance due to “the strong market environment.” It increased dividend guidance from last month’s “at least $150 million” to at least $200 million for the second half of 2021, payable in April 2022, and from “at least $315 million” to at least $400 million for FY2022 (GM Sept. 24, p. 31).