UAE’s Borouge to become the latest IPO in a wave of Middle East listings

The lure of high dividends has been a huge draw for global investors amid a recent wave of mega listings in the Gulf region.

Rustam Azmi | fake images

DUBAI, United Arab Emirates – Petrochemical company Borouge will list on the Abu Dhabi stock exchange next month, marking the latest in a series of mega public offerings across the Middle East.

Borouge, a joint venture between the Abu Dhabi National Oil Company and Austria’s Borealis, will sell 3 billion shares in the initial public offering, representing a 10% stake. No price range was given.

“Together with our long-standing partner, Borealis, I am delighted to announce our intention to float a minority stake in Borouge,” Sultan Al Jaber, the UAE’s minister of industry and advanced technology and managing director, said in a statement. executive director of the ADNOC group. Wednesday.

“Through Borouge and our recently announced 25% equity investment in Borealis, ADNOC is poised to capitalize on significant industrial and consumer-led growth in the petrochemical sector in the coming decades,” he added.

The IPO could raise up to $2 billion when it goes public on the Abu Dhabi stock exchange on June 3, according to reports. ADNOC is expected to own approximately 54% of Borouge’s share capital after listing, while Borealis would own approximately 36%.

“Borouge has become one of the world’s leading petrochemical companies creating polyolefin solutions since it was established in 1998, with the support of our shareholders, ADNOC and Borealis,” said Borouge CEO Hazeem Sultan Al Suwaidi. , it’s a statement.

“Demand for our innovative polyolefin solutions will increase in the coming years, driven by our differentiated products and technology, commitment to sustainable operations and solutions, and strong industry growth trends,” he added.

ADNOC and Borealis said the subscription period for retail investors will be May 23-28, while qualified investors will be able to buy shares from May 23-30. Borouge said investors would receive dividends twice each fiscal year, including fixed dividends of $325 million in September 2022 and $650 million in March 2023.

Borouge has facilities in Abu Dhabi, Shanghai and Singapore, employs more than 3,000 people, and has customers in 50 countries in the Middle East, Africa and Asia.

middle east wave

The lure of high dividends has been a huge draw for global investors amid a recent wave of mega listings in the Gulf region, led by Saudi Arabia and the United Arab Emirates.

Both countries are actively taking advantage of high demand and high energy prices to take state-owned companies public.

Borouge’s initial public offering also marks the latest in a series of public offerings by Abu Dhabi’s ADNOC Group, including the listing of ADNOC Distribution, ADNOC Drilling’s $1.1 billion offering last year, and the recent listing of the fertilizer business. Fertiglobe, as ADNOC seeks to unlock value in all of its businesses.

The listing of Abu Dhabi Ports in February also marked a milestone in the development of the UAE’s capital markets, which have improved in depth and sophistication in recent years.

Neighboring Dubai has also sought to tap into investor demand in the region by embarking on a major IPO, with state-owned DEWA launching a $6.1bn offering last month.

Dubai plans to take up to a dozen state-owned companies public in the coming months, and recently launched a SPAC framework in an effort to attract new investment.

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