OCI NV, Amsterdam, and Abu Dhabi’s state-energy company, ADNOC, raised gross proceeds of over $795 million in the initial public offering (IPO) of their Middle Eastern fertilizer joint venture Fertiglobe, now successfully completed, following strong demand from international, regional, and local investors.
Total gross demand for the IPO amounted to over $17.4 billion, implying an oversubscription level of 22 times in aggregate, OCI and ADNOC said on Oct. 20.
Fertiglobe’s shares were sold at AED2.55 each, the middle of the previously set price range of between AED2.45-AED2.65 per share. The offering size was confirmed at about 1.15 billion shares, equivalent to 13.8 percent of Fertiglobe’s issued share capital (GM Oct. 15, p. 29).
Based on the final offer price, Fertiglobe’s market capitalization upon listing is expected to be about $5.8 billion, said OCI and ADNOC. Listing and start of trading on the Abu Dhabi Securities Exchange (ADX) are expected to start at 10.00 am (UAE time) on Oct. 27, subject to customary closing conditions.
Following the listing, OCI said it will indirectly continue to own a majority of Fertiglobe’s share capital, while ADNOC will indirectly own 36.2 percent. According to Bloomberg calculations, OCI now owns around half of the jv company’s shares. Prior to the IPO, it owned a 58 percent stake and ADNOC a 42 percent holding.
Inclusive Capital Partners LP, Singapore’s sovereign wealth fund GIC Pte., and Abu Dhabi Pension Fund had committed about $231 million between them under cornerstone investment agreements on Oct. 12 ahead of the IPO (GM Oct. 15, p. 29).
OCI said last week Inclusive Capital Partners’ Founder and Managing Partner and U.S. activist investor Jeff Urban will join Fertiglobe as an independent board member following the listing.
The IPO will be the third largest ever on the ADX, and undoubtedly benefited 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 has forced some fertilizer companies to curtail ammonia output in recent weeks (GM Oct. 8, p. 1).