Adani family, led by Gautam Adani to invest $75 million in Abu Dhabi-headquartered petrochemicals firm Borouge’s $2 billion initial public offering (IPO), which is touted to be the biggest ever listing in the emirate. This is the second major investment by Adani family this month after it signed definitive agreements for the acquisition of Switzerland-based Holcim’s entire stake in leading cement companies – Ambuja Cements and ACC - for $10.5 billion.
Borouge, a joint venture between Abu Dhabi National Oil Company (ADNOC) and Austrian chemical producer Borealis, has secured a total commitment of about $570 million from seven cornerstone investors, including family office of billionaire Gautam Adani, Abu Dhabi state holding firm ADQ, the Abu Dhabi Pension Fund, the Emirates Investment Authority, and Alpha Dhabi.
Out of $570 million, Borouge focuses to garner $120 million from Abu Dhabi Wealth Fund ADQ and $100 million from Abu Dhabi Pension Fund, while Emirates Investment Authority has committed $75 million. Among others, the firms controlled by International Holding Company, Multiply Group, and Alpha Dhabi Holding, have decided to subscribe for shares worth $50 million, $50 million, and $100 million, respectively. The minimum lock-in period for the investments by the cornerstone investors are six months.
“All of the foregoing investors have committed to purchase shares at the offer price, with all shares subject to a minimum six-month lock-up arrangement following listing,” the company mentions in a release on May 23.
The petrochemical joint venture company plans to raise $2 billion via public listing of shares on the Abu Dhabi Securities Exchange (ADX) at an offer price of 2.45 dirhams ($0.67) per share, implying an equity value of around $20 billion. With this, Borouge is set to surpass ADNOC Drilling Co.'s $1.1 billion IPO last year as the largest ever to date in Abu Dhabi’s history.
The IPO will see existing shareholders Adnoc and Borealis selling 3 billion shares in Borouge, amounting to 10% equity stake of the company. The offer opened for subscription on May 23 and will close on May 28 for the UAE retail offering and May 30 for the qualified investor offering. The Borouge stock is expected to be listed on the ADX on June 3, 2022.
Founded in 1998 as a strategic joint venture between the ADNOC and Vienna-based Borealis, Borouge is one of the world’s leading providers of innovative and differentiated polyolefin solutions for agriculture, infrastructure, energy, packaging, mobility and healthcare industries. It provides innovative plastics solutions for the energy, infrastructure, mobility, packaging, healthcare and agriculture industries. Following the fourth world–scale expansion, Borouge will become the world's largest single-site polyolefin complex by 2025, with an overall production capacity of 6.4 million tonnes annually.