After Aramco listed 1.8% of its shares back in 2019, another MENA oil drilling giant is preparing to list on the Abu Dhabi Stock Exchange (ADX). Abu Dhabi's Oil Company (ADNOC) announced that 7.5% of its drilling shares will be listed on ADX in October after regulatory approval. 5% of these shares will be reserved for the Emirates Investment Authority, while the remaining shares will be available to private investors. ADNOC Drilling will initially offer a fixed dividend of $325m for H2 of 2021 and then raise it 5% annually over the next five years from a starting point of $650m.
This is not the first time that ADNOC has decided to list its shares. Back in 2017, the company listed 10% of its distribution business on the ADX, followed up by raising the offering to 20% last year. With this latest offering, ADNOC continues pursuing its aggressive value creation strategy, allowing it to create new investment opportunities and boost its profile with the international investment community.
Why it matters
ADNOC's 7.5% share offering will raise ADX's free-float market cap by $750m and add $10b to the market cap. This represents 2.6% of ADX's total market cap. Thanks to record trading and listings such as ADNOC's, ADX boosted its market capitalization beyond $272b. ADX now looks to more than double its market capitalization over the next three years.