Abu Dhabi pension fund to acquire 31% stake in ADNOC property vehicle for $900mln

Deal part of ADNOC's strategy to unlock value from non-oil assets

  
A general view of ADNOC headquarters in Abu Dhabi, United Arab Emirates May 29, 2019.

A general view of ADNOC headquarters in Abu Dhabi, United Arab Emirates May 29, 2019.

REUTERS/Christopher Pike

Abu Dhabi National Oil Company (ADNOC) said Tuesday that Abu Dhabi Pension Fund would acquire 31 percent of the energy company's real estate vehicle. 

Under the agreement, ADPF will acquire 31 percent of Abu Dhabi Energy Real Estate Company (ADREC), which was created to hold ADNOC's 51 percent stake in Abu Dhabi Property Leasing Holding Co, for $900 million, the energy company said in a statement.

The partnership with the pension fund follows the announcement by ADNOC in September last year that it had entered into a long-term strategic investment pact with Apollo Global Management Inc. and its subsidiaries, one of the world's largest alternative investment managers, and a group of institutional investors, for an underlying real estate portfolio valued at $5.5 billion.

ADPLHC was created to leverage rental income streams from select ADNOC real estate assets under a 24-year master lease agreement. ADPLHC holds long-term leasehold interests underpinned by a sizeable, diversified portfolio of ADNOC real estate assets located across Abu Dhabi.

Following the transaction's completion, ADNOC will hold 69 percent and ADPF 31 percent of ADEREC, whilst Apollo and its subsidiaries will continue to hold 49 percent of ADPLHC directly.

ADNOC will maintain full ownership and control over the select real estate and social infrastructure assets and responsibility for all operations and maintenance, the statement said.

The partnership "allows ADNOC to unlock further value from non-oil and gas strategic infrastructure to redeploy into its core business and strategic growth projects," the energy company said.

(Writing by Brinda Darasha; editing by Seban Scaria)

brinda.darasha@refinitiv.com

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