• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 1 min Iran Is Winning Big In The Middle East
  • 6 hours Trump cancels Denmark visit amid spat over sale of Greenland
  • 9 hours Nor Chicago, nor Detroit: Killings By Police Divide Rio De Janeiro Weary Of Crime
  • 7 hours Strong, the Strongest: Audi To Join Mercedes, BMW Development Alliance
  • 17 mins Not The Onion: Vivienne Westwood Says Greta Thunberg Should Run the World
  • 5 hours US to Drown the World in Oil
  • 1 day Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 11 hours With Global Warming Greenland is Prime Real Estate
  • 1 hour OPEC will consider all options. What options do they have ?
  • 8 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 1 day NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 1 day A legitimate Request: France Wants Progress In Ukraine Before Russia Returns To G7
  • 1 day What to tell my students
Alt Text

Rampant Corruption In The World’s Last Oil Frontier

Endemic corruption in Kurdistan continues…

Alt Text

Brazil Government Looks To Fully Privatize Petrobras By 2022

Brazil’s government wants to privatize…

Oxford Business Group

Oxford Business Group

Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic intelligence on the markets of the Middle East, Africa, Asia…

More Info

Premium Content

Abu Dhabi Steps Up Privatization Push

On February 27 Mubadala Investment Company, which plays a key role in Abu Dhabi’s investment activity, announced that a stake of 10-15 percent in one of its key holdings, Emirates Global Aluminium (EGA), would be floated later this year.

Khaldoon Khalifa Al Mubarak, the company’s chief executive, said Mubadala has been working towards getting ready for a listing for several years and noted, “the market is in the right place”.

Jointly owned by Mubadala and Investment Corporation of Dubai, EGA is the world’s third-largest producer of primary aluminium outside of China, with output of 2.6m tonnes in 2017. It generated profits of Dh3.3bn ($898.6m) for the year, a 59 percent increase over 2016.

EGA’s offering may take the form of a joint listing on the exchanges of its two owning emirates, according to some local press reports, though this is as yet unconfirmed. Should it list both in Dubai and Abu Dhabi, it would be the first UAE company to be represented on both exchanges.

The firm’s sale looks set to be just the start of Abu Dhabi’s plans to unlock the share value of some of its key economic assets in 2018. In an interview with Bloomberg, also on February 27, Al Mubarak said shares in at least two more of Mubadala’s holdings could be offered to the public this year.

Strong interest in public assets

In his interview with Bloomberg, Al Mubarak said any partial flotation of EGA could generate around Dh11bn ($3bn), topping the Dh7.7bn ($2.1bn) total value of IPOs in the UAE last year.

Of the UAE total for 2017, the emirate’s contribution came from the IPO of ADNOC Distribution, the fuel distribution unit of Abu Dhabi National Oil Company (ADNOC), which raised $851m. The offering of 10 percent of the ADNOC subsidiary’s shares last December represented the largest single IPO conducted in Abu Dhabi in a decade and the first in six years.

Interest in the issue was strong, with the offering being oversubscribed 22 times, a level of demand that bodes well for future IPOs from public enterprises.

The listing also helped to balance the Abu Dhabi Securities Exchange away from its heavy weighting towards the banking, financial and real estate sectors, broadening the market for investors and offering a model to other firms thinking about going public in what is hoped to be a reinvigorated market for IPOs.

That weighting could shift further, with ADNOC chief executive Sultan Al Jaber hinting that the company could be considering the listing of other units in the future, saying at the time of the launch that minority sales in other subsidiaries were possible, and repeating in late February there were “some new creative capital structures ideas” that would be introduced soon.

Related: U.S. Rig Count Climbs As Oil Rallies

With ADNOC looking to embark on a programme of expansion, and in particular building on its downstream activities where it foresees strong growth potential, the company could again tap the IPO market to fund the investments needed to achieve its goal of boosting petrochemicals output to 14.4m tonnes by 2025, three times present levels.

Conditions ripe for listings

Though the government is leading the resurgence in IPO activity in the UAE, the authorities have been working to ease regulations to make listing more attractive for private businesses, launching reforms in 2015 to this end. Improving market conditions could also provide an impetus going forward.

Globally, IPO volumes in the first nine months of 2017 exceeded the full-year total for 2016, according to consultancy EY, while more locally the increasing stability in oil prices, which hit a two-year high in September last year, has enhanced confidence among the business community. The latest OBG Business Barometer: UAE CEO Survey, released this month, found that 30 percent of private sector CEOs in the UAE see MENA as the region with the greatest potential for trade and investment flows, followed by South Asia and East Asia at 22 percent each.

By Oxfordbusinessgroup.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play