ABU DHABI - Shares of the fuel distribution unit of Abu Dhabi National Oil Co made a strong stock market debut on Wednesday, opening 16 percent above their initial public offer price after Abu Dhabi's first IPO in six years.
The strong opening eased concern about demand for the stock last week, when the initial pricing range for the IPO was lowered in the aftermath of a weak debut in neighbouring Dubai for property firm Emaar Development
ADNOC Distribution opened at 2.90 dirhams against its IPO price of 2.50 dirhams. After 45 minutes it was trading at 2.77 dirhams.
Abu Dhabi's state oil firm ADNOC raised $851 million through the sale of a 10 percent stake in its distribution unit.
It was the largest IPO in Abu Dhabi for a decade, and is expected to pave the way for as many as several listings next year. ADNOC Distribution is also the first Gulf energy asset to be privatised in an era of low oil prices that began three years ago. Saudi Arabia plans to list 5 percent of its national oil company Saudi Aramco by the end of 2018. Saudi officials say it could raise $100 billion.
ADNOC Distribution's deputy chief executive John Carey told reporters that the company plans to expand its fuel stations into Dubai and Saudi Arabia in 2018.
The company is the leading fuel distributor in the United Arab Emirates with an approximately 67 percent market share by number of retail fuel service stations, which stood at 360 at the end of September.
For the 2018 financial year, the distribution unit intends to pay at least $400 million in dividends and the amount in 2019 will be similar, ADNOC has said.
(Writing by Saeed Azhar; Editing by Andrew Torchia) ((Saeed.Azhar@thomsonreuters.com; +65-64035664 ; Reuters Messaging: email@example.com))