State energy firm Abu Dhabi National Oil Company (ADNOC) and chemical producer OCI N.V. (OCI) will offer 13.8 percent of shares in their fertiliser joint venture Fertiglobe in an initial public offering (IPO).

The Abu Dhabi-based Fertiglobe, a 58:42 partnership between OCI and ADNOC, will list on the Abu Dhabi Securities Market (ADX) in late October, subject to it receiving all regulatory approvals, the company said in a statement on Tuesday.

The IPO is open to individuals and other investors in the UAE as part of a retail offering and to qualified institutional and other investors as part of the qualified investor offering.

Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group CEO of ADNOC said: "Fertiglobe offers a unique investment opportunity to access an increasingly critical global sector, while also benefiting from emerging opportunities in the low carbon ammonia value chain and the hydrogen economy."

Fertiglobe's IPO will be the third time ADNOC has sold a stake in its subsidiaries. Last month it raised $1.1 billion from an IPO where it offered 11 percent of the company’s shares. In 2017, it sold a 10 percent stake in ADNOC Distribution raising $851 million. The state energy producer's strategic plan is to monetize part of its non-core assets.

Following the IPO, OCI, which is backed by Egyptian businessman Nassef Sawiris, is expected to indirectly continue to own a majority of Fertiglobe’s share capital, while ADNOC will indirectly own at least 36.2 percent. ADNOC currently holds a 42 percent stake in the fertilizer unit, while OCI holds 58 percent.

The offer share price will be determined once the book-building process is complete. ADNOC and OCI may amend the size of the offering at any time before pricing.

Citigroup Global Markets Ltd, First Abu Dhabi Bank PJSC, HSBC Bank Middle East Ltd., and Morgan Stanley & Co. International plc have been appointed as joint global coordinators. EFG-Hermes UAE Limited, Goldman Sachs International and International Securities L.L.C are the joint bookrunners.

Fertiglobe, which is one of the world’s largest seaborne exporter of urea and ammonia combined, is the largest producer by capacity in the MENA region. It is also an early mover in clean ammonia. In June 2021, Fertiglobe joined a project by ADNOC and sovereign wealth fund ADQ to develop a one million tons per year blue ammonia facility in Ruwais, Abu Dhabi.

Fertiglobe generated a cash flow from operations of $520.8 million and $482.0 million respectively for the year ended 31 December 2020 and for the six months ended 30 June 2021. It has adjusted EBITDA Margins of 29.2 percent and 37.6 percent respectively, for the year ended 31 December 2020 and for the six months ended 30 June 2021. 

 (Reporting by Brinda Darasha; editing by Daniel Luiz)

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