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Taqa, ADPower complete merger, create Dh200b giant

Waheed Abbas/Dubai
Filed on July 1, 2020


Abu Dhabi National Energy Company (Taqa) and Abu Dhabi Power Corporation (ADPower) on Wednesday announced completion of their merger, creating one of the largest utility firms in the region with combined assets estimated at Dh200 billion.

Listed on the Abu Dhabi Securities Exchange, Taqa is now the UAE's third-largest publicly traded company by market capitalisation and among the top-ten integrated utility companies in Europe, Middle East and Africa (EMEA) by regulated assets.

Global ratings agency Moody's Investors Service also upgraded the issuer rating of Taqa on Wednesday to Aa3 from A3 and its short term rating to P-1 from P-2. The outlook on all ratings is stable.

Moody's said the merger significantly enhanced Taqa's asset portfolio, adding transmission and distribution assets to its generation assets and creating a monopoly integrated utility in Abu Dhabi.

Under the deal, ADPower transferred majority of its power and water generation, transmission and distribution assets to Taqa in exchange for 106,367,950,000 new shares. ADPower will own 98.60 per cent of the entire issued share capital of Taqa. It is Taqa's intention to seek an increase to the free float through a follow-on public offering, the companies said in a statement sent to Abu Dhabi bourse.

Khalifa Salem Al Mansouri, CEO of Abu Dhabi Securities Exchange, said listing of high quality companies will raise bourse's profile, making it more attractive to a broader range of investors and boosting liquidity as the free float increases.

Taqa now owns all of Abu Dhabi's power and water transmission and distribution companies in addition to its existing international assets in Canada, Ghana, India, Iraq, Morocco, the Netherlands, Oman, Saudi Arabia, the UK and the US.

It has 23 GW of power generation capacity globally and 916 million imperial gallons per day (MIGD) of water desalination capacity, of which 1.4 GW are from renewable sources. Taqa also has a further 4.4 GW and 200 MIGD under development, including 2 GW from renewable sources. Across the UAE, its assets now include 12 power and water generation plants in operation.

Jasim Husain Thabet has been appointed CEO and managing director of Taqa while Saeed Hamad Al Dhaheri becomes deputy CEO and Stephen John Ridlington as act as chief financial officer.

"Taqa's strong balance sheet, predictable income, access to global capital markets and deep industry expertise enables it to play an active role in the UAE's diversification strategy, putting a strong emphasis on clean sources. The company will invest and deploy new technology to ensure continued reliable and efficient supply of power and water and additional sustainable capacity to meet the demands of the UAE economy," said Mohamed Hassan Alsuwaidi, chairman of Taqa.

Jasim Husain Thabet said the combined entity has a strong international footprint that enables it to pursue growth opportunities in the GCC and beyond and offer shareholders with a sustainable dividend policy.

"We benefit from a strong capital structure, a robust business model and exclusivity rights to participate in all generation and water desalination projects tendered in Abu Dhabi over the next decade with a minimum 40 per cent equity share," he added.

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