Abu Dhabi National Oil Company Unveils Share Sale of Adnoc Drilling Subsidiary

Abu Dhabi National Oil Company (ADNOC) announced plans to sell a portion of its ownership in its subsidiary, Adnoc Drilling, through a bookbuild offering. This move aims to raise capital for ADNOC and increase liquidity for Adnoc Drilling shares.

The offering encompasses roughly 880 million ordinary shares, representing approximately 5. 5% of Adnoc Drilling's total issued shares. The bookbuild process, which determines the final share price and allocation based on investor interest, commences immediately and is expected to conclude by May 23rd, with a possibility of acceleration.

ADNOC currently holds an 84% majority stake in Adnoc Drilling. By divesting a portion of its ownership, the company seeks to achieve several objectives. Increased liquidity translates to more active trading of Adnoc Drilling shares, potentially attracting a broader range of investors. This could also pave the way for Adnoc Drilling's inclusion in the Morgan Stanley Capital International (MSCI) Emerging Market Index, subject to the company meeting the index's criteria during the next quarterly review.

The offering caters exclusively to institutional investors, adhering to regulations set forth by Rule 144A and Regulation S of the U. S. Securities Act. These regulations govern the sale of unregistered securities to qualified institutional buyers outside the United States.

This move by ADNOC follows an initial public offering (IPO) of Adnoc Drilling shares in 2022, which generated $1. 1 billion. The current offering presents an opportunity for ADNOC to further capitalize on Adnoc Drilling's success and bolster its own financial standing.

The final details of the offering, including the share price and total number of shares sold, will be revealed upon completion of the bookbuilding process. This method allows ADNOC to gauge investor interest and determine the most favorable pricing for the share sale.

ADNOC's decision to offer a portion of Adnoc Drilling reflects a growing trend within the energy sector. National oil companies around the world are increasingly seeking to monetize their assets and unlock additional sources of capital. This strategy can contribute to revenue diversification and support investments in new technologies and ventures.

The impact of ADNOC's offering on Adnoc Drilling's long-term prospects remains to be seen. However, the potential for increased liquidity, a broader shareholder base, and potential index inclusion could all contribute positively to the company's future growth.

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