Fertiglobe shares leap 21% on Abu Dhabi debut

Fertiglobe, a joint venture between Abu Dhabi National Oil Company (Adnoc) and chemicals producer OCI, rose 21 per cent above its listing price on its Abu Dhabi market debut on Wednesday.

The venture’s shares traded at about Dh3.09 ($0.84) shortly after the market opened, compared with Dh2.55 in its initial public offering (IPO), implying a market capitalisation of $5.8 billion at the time of listing. It closed up 17.64 per cent at Dh3 with 203.67 million shares exchanged hands on the opening day at the Abu Dhabi Securities Exchange (ADX), becoming the third-largest ever listing on the ADX.

The initial public offering (IPO), which raised over $795 million, experienced strong demand from local and international investors, with orders amounting to over $17.4 billion and oversubscription above 22 times in aggregate, and 32 times for the qualified investor tranche — excluding cornerstone investors.

Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Adnoc Managing Director and Group CEO, and Fertiglobe Chairman, said the success of Fertiglobe’s IPO, which is the first listing of a free zone company on an onshore stock exchange in the UAE, underscores Adnoc’s prominent role in supporting the growth and diversification of the UAE’s economy and strengthening Abu Dhabi’s increasingly vibrant capital market.

“With operations across Mena and a global customer base, Fertiglobe’s listing is expected to elevate Abu Dhabi and the UAE’s status as a key destination for foreign direct investment, in line with the UAE’s ‘Principles of the 50’,” Dr Al Jaber said before the bell ringing ceremony at ADX.

Fertiglobe is the world’s largest seaborne exporter of urea and ammonia combined, the largest nitrogen fertiliser producer in the Mena region by production capacity, and an early mover in clean ammonia. The strong demand for its shares underscores the attractiveness of its business model, growth opportunities from emerging demand for clean ammonia, as well as a robust dividend policy, supported by superior free cash flow conversion capabilities across commodity cycles.

Dividend guaranteed

Fertiglobe expects to distribute a dividend of at least Dh735 million ($200 million) for second half of 2021 and Dh1.468 billion ($400 million) for financial year 2022.

Mohammed Ali Al Shorafa Al Hammadi, Chairman of ADX, congratulated Fertiglobe on the success of their IPO on the Abu Dhabi Securities Exchange and said the strong demand for the IPO is a clear indicator of Fertiglobe’s position as a market leader in a fast-growing industry.

“This is an exciting moment for the nation as Fertiglobe becomes the first free zone company to be traded on an onshore stock exchange in the UAE and the third-largest ever listing on the ADX. The listing provides a unique opportunity for investors looking to access the growth driven by the emerging global demand for clean ammonia,” he said.

Nassef Sawiris, Executive Chairman of OCI NV and Vice-Chairman of Fertiglobe, said the success of “our initial public offering and the strong demand for Fertiglobe’s shares is another historic milestone for Abu Dhabi and is a great testimony to the success of the ADX as a pre-eminent financial hub in the region.

“The IPO also reflects the strength of OCI and Adnoc’s strategic partnership and we are proud that Fertiglobe can ring in a new chapter for the UAE’s economy and the stock market and bolster their visibility in the global markets,” he said.

ADX One strategy success

Ahmed El Hoshy, OCI NV CEO and Fertiglobe CEO, said Fertiglobe has a track record of delivering solid performance.

“We are excited by emerging opportunities in clean ammonia in the growing hydrogen economy, for which we are ideally positioned. Together with a world-class Fertiglobe team and benefiting from strong support from our sponsors, we can look forward to a bright future,” he said.

The company’s debut on the ADX is an indicator of the progress of the UAE’s private sector economy, and the growing depth and sophistication of local capital markets — as demonstrated by cornerstone investment agreements with institutions including the Abu Dhabi Pension Fund; GIC, Singapore’s sovereign wealth fund; and Inclusive Capital Partners, L.P., a US-based investment adviser.

Saeed Hamad Al Dhaheri, chief executive of ADX, said the exchange is proud to help another UAE champion access regional and international investors.

“Our ADX One strategy, launched at the start of the year, aims to increase market capitalisation by creating more opportunities for investors and by delivering a seamless experience for companies looking to reach new levels of growth,” he said.

“We continue to see investor appetite for Abu Dhabi businesses rise as proven by record levels of investor activity and market capitalisation in 2021. We look forward to supporting Fertiglobe through its next chapter as a listed company and we welcome other free zone companies to explore the benefits of listing on ADX,” he added.

The IPO was priced at the middle of its range on October 20, 2021, with the final offer price set by the selling shareholders to provide an attractive investment opportunity for new shareholders. The first tranche, reserved for UAE retail investors, comprised 10 per cent of the total offer shares; and the second tranche reserved for local, regional, and international qualified institutional investors comprised 90 per cent of the total offer shares.

— muzaffarrizvi@khaleejtimes.com