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ADNOC and OCI’s “Fertiglobe” announced the offering price range, opening the subscription period for their initial public offering on ADX

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Fertiglobe, a 58:42 partnership between OCI and ADNOC, today announced the start of its offer range and subscription period for its initial public offering (IPO) on the Abu Dhabi Stock Exchange (ADX).

The subscription period for the IPO will begin on Wednesday, October 13, 2021, and will last until Monday, October 18, 2021, the first phase (issue to individuals and other investors in the UAE, or “UAE retail offering”) , And Tuesday, October 19, 2021, the second batch (sale to qualified institutional investors and other investors in many countries/regions including the UAE, or “qualified investor sale”).

The price range of this offering is set at AED2.45 to AED2.65 per share, which means that the equity value is between 5.5 billion and 6 billion US dollars. The final offer price is expected to be announced on Wednesday, October 20, 2021. The stock is expected to be traded on ADX on Wednesday, October 27, 2021.

The selling shareholder is expected to sell 1,145,582,011 shares, accounting for 13.8% of the company’s issued share capital. The selling shareholder reserves the right to modify the form of the offer at any time before the end of the subscription period, subject to applicable laws and approved SCA. Assuming that all the shares offered have been sold, the size of the offering will be approximately US$765 million to US$827 million.

In addition, Fertiglobe announced its intention to appoint Jeffrey Ubben as an independent member of the board of directors; and the company has signed cornerstone investment agreements with the following institutions: funds managed by Inclusive Capital Partners LP (“In-Cap”); Abu Dhabi Pension Fund and Singapore Sovereign Wealth Fund GIC Private Limited.

Fertiglobe’s IPO provides investors with an attractive opportunity to access the world’s largest maritime exporter of urea and ammonia, with significant non-GDP growth levers, attractive financial conditions, and low maintenance capital. Expense requirements and strong cash generation. The company’s production capacity is supported by a young asset base and extensive global warehousing and distribution infrastructure, with direct access to major ports in the Mediterranean, the Red Sea and the Arabian Gulf. As a pioneer of clean ammonia, Fertiglobe has the ability to take advantage of the global transition to a hydrogen economy. Ammonia has become one of the most promising products to achieve energy transition.

Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, ADNOC Managing Director and Group Chief Executive Officer and Chairman of Fertiglobe, said: “Since the announcement of our intention to go public, we have seen strong interest in the IPO and we are now very happy to be able to Individuals and institutional investors provide opportunities to participate in this exciting growth story. This IPO is a milestone moment for ADNOC and Fertiglobe, and it is also the deepening and development of the UAE equity capital market under the guidance of my country’s leadership and the UAE’s “50-country principle” Milestone moment.

“Fertiglobe is in an ideal position to play a leadership role in key global industries, while at the same time gaining new opportunities in the rapidly emerging hydrogen economy. As partners, ADNOC and OCI share a common vision for sustainable growth and value creation, and Will continue to be a long-term and loyal shareholder of Fertiglobe.”

Cornerstone investor

On October 12, 2021, OCI NV and a subsidiary of Abu Dhabi National Petroleum Corporation signed a cornerstone investment agreement with the company. According to this, the following cornerstone investors promised to purchase shares issued by qualified investors at the final offer price, and receive Three-one-month lock-in arrangement after admission, the total commitment amount is c. US$231 million (approximately AED 847 million):

· A fund managed by Inclusive Capital Partners, LP, which is a SEC investment advisor registered in San Francisco, California, USA. Founded in 2020, In-Cap seeks long-term shareholder value through active cooperation with companies whose core business contributes to the health of the planet and its residents;

· The Abu Dhabi Pension Fund is an important Abu Dhabi government entity.The fund was established in 2000 to manage contributions, pensions and end-of-service benefits for UAE nationals and their beneficiaries working or retiring in the government and private sector of the Emirate of Abu Dhabi; and

· GIC Private Limited (“GIC”) is a global investment management company established in 1981 to manage Singapore’s foreign exchange reserves. GIC invests internationally in stocks, fixed income, foreign exchange, commodities, money markets, alternative investments, real estate and private equity. GIC’s current investment portfolio exceeds US$100 billion, making it one of the world’s largest fund management companies.

Dividend policy

The board of directors has adopted a prudent dividend policy, which aims to return almost all of the company’s distributable free cash flow to shareholders while providing growth opportunities and maintaining investment-grade credit status. Fertiglobe plans to pay two cash dividends in each financial year. The first payment will be made in October of the current year based on the financial performance of the first six months of the financial year, and the second payment will be made in April of the following year based on the financial performance for the last six months of the financial year. Month, subject to approval by the general meeting of shareholders. Any dividends will be paid in cash.

Taking into account the strong trading environment for ammonia and urea, Fertiglobe decided to increase its guidance on dividend payments:

· Fertiglobe expects to distribute at least US$200 million in dividends for the second half of the year ending December 31, 2021 in April 2022 (above the previous guidance of at least US$150 million); and

· The final dividend amount for the fiscal year ending December 31, 2022 will depend on the trading environment. Based on the current market outlook, Fertiglobe is expected to pay a dividend of at least US$400 million (above the previous guidance of at least US$315 million), of which 50% will be paid in October 2022 and 50% will be paid in April 2023 .

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