The proposed public debut of Abu Dhabi’s Borouge offshoot is a testament to its growth momentum over the years.
The Abu Dhabi National Oil Company (ADNOC) owned petrochemicals business, Borouge is set to go public on the Abu Dhabi Stock Exchange (ASX) in early June. The company, a joint venture with Austria’s Borealis, is set to offer 3 billion shares in the upcoming Initial Public Offering (IPO), a figure that corresponds to approximately 10% of its shares.
As Abu Dhabi’s petrochemical firm is likely valued at $20 billion, the size of the offering is pegged at around $2 billion. The IPO is one of the Middle East’s latest mega listings as state-owned companies are capitalizing on bullish global investor sentiment to take their firms public.
“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 ADNOC’s managing director and group CEO, said in a statement Wednesday. “Through Borouge and our recently announced 25% equity investment in Borealis, ADNOC is poised to capitalize on the significant industrial and consumer-led growth in the petrochemicals sector over the coming decades.”
The subscription and purchase of stakes are slated for May 23 to May 28 for retail investors with an extension till May 30 for all qualified investors to participate in the IPO. The listing on ASX is slated for June 3 and the company said dividends will be distributed twice a year, in September and March respectively.
Borouge’s attractiveness is heightened as the company comes off as one of the dominant manufacturers of Polyolefin solutions for key customers in the Middle East, Asia, and Africa. Polyolefin finds uses in several areas including the creation of food and electronics packaging materials, toys, and wetsuits amongst others.
Abu Dhabi’s Borouge and Apparent Growth Momentum
The proposed public debut of Abu Dhabi’s Borouge offshoot is a testament to its growth momentum over the years.
“Borouge has grown into one of the world’s leading petrochemical companies that creates polyolefin solutions since it was established in 1998, supported by our shareholders, ADNOC and Borealis,” Borouge CEO Hazeem Sultan Al Suwaidi said in a statement. “Demand for our innovative polyolefin solutions is set to increase in the years ahead, driven by our differentiated products and technology, commitment to sustainable solutions and operations, and robust industry growth trends.”
The firm is set to distribute the sum of $325 million in dividends payout this December and $650 million in March 2023. ADNOC will hold a 54% stake in the listed company with Borealis maintaining a 36% holding.
The listing of Borouge is a showcase for a thriving UAE capital market as other state-owned companies including Abu Dhabi Ports, ADNOC Drilling, and ADNOC distributions have all trailed similar public listing paths. Elsewhere, the Dubai Water and Electricity Authority (DEWA) pulled as much as $6.1 billion when it went public as reported by Coinspeaker back in April. This showcases a ripple effect in the attractiveness of Middle Eastern firms to global investors.
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