Borouge $2bn IPO set to be biggest ever listing on Abu Dhabi Exchange

SINGAPORE (ICIS)–UAE-based polyolefins major Borouge could raise about $2bn from its initial public offering (IPO), making it the largest-ever listing in Abu Dhabi and marking another step in the Emirate’s plan to boost its non-oil investments to diversify its economy.

The UAE-based petrochemicals firm on 23 May said that it has set the offer price for the IPO at Emirati Dirham (AED) 2.45, which would imply an equity evaluation of about $20bn for the firm.

The company plans to list some 3bn shares on the ADX, representing 10% of its issued share capital, with trading to begin on 3 June this year.

The IPO subscription period started on 23 May and runs until 28 May for retail investors.

Borouge on 23 May said that it has secured seven cornerstone investors for its IPO.

This includes Abu Dhabi-based investment firm International Holding Company (IHC), private investment company Multiply Group, conglomerate Alpha Dhabi Holding, Abu Dhabi state-holding firm ADQ, Abu Dhabi Pension Fund, UAE’s sovereign wealth fund Emirates Investment Authority as well as India’s Adani family.

International Holding Company, Multiply Group, and Alpha Dhabi Holding have committed to subscribe for shares in the offering in amounts equal to $50m; $50m; and $100m, respectively.

Furthermore, ADQ has committed $120m; Abu Dhabi Pension Fund has committed $100m; Emirates Investment Authority has committed $75m; and the Adani Family has committed $75m towards the offering.

Borouge is a joint venture between UAE’s state-owned energy major ADNOC and Austria’s Borealis. Post-IPO, ADNOC will have a 54% stake in Borouge, while Borealis’ stake will be 36%.

Abu Dhabi is one of the seven emirates of the UAE and serves as its capital.

Its production capacity currently stands at around 2.7m tonnes/year of polyethylene (PE) and 2.2m tonnes/year of polypropylene (PP), according to the company.

Development of the company’s phase four project at the Ruwais complex is underway following the completion of its fifth PP unit at the site in the first quarter of this year.

The company’s $6.2bn Borouge 4 project is expected to be completed in 2025 and will boost its polymers capacity in Ruwais to 6.4m tonnes/year.

ADNOC on 24 May signed an agreement with BP to take a 25% stake in the design stage of the blue hydrogen project, H2Teesside, marking its first investment in the UK.

Separately, BP will also join ADNOC to evaluate a new blue hydrogen project in Abu Dhabi, conducting a joint feasibility study for a world-scale, low-carbon hydrogen project in the country.

ADNOC and India’s Reliance Industries Ltd (RIL) earlier last year signed an agreement to build a greenfield petrochemicals facility to produce chlor-alkali, ethylene dichloride and polyvinyl chloride (PVC) in the UAE.

Borouge’s expansions will help Abu Dhabi’s plan to achieve 64% contribution to GDP by the non-oil sectors, including petrochemicals, by 2030 from around 50% currently.

With its large reserves of natural gas and associated liquids, Abu Dhabi is well-positioned to increase its participation in the petrochemicals sector, the Abu Dhabi government said in a report released in April last year.”

“As in the case of the Abu Dhabi’s refining expansion, the growth of the Emirate’s petrochemical industry represents another way in which Abu Dhabi can capture a larger share of the hydrocarbon value chain,” it said.

“Such expansion will also assist the Emirate in developing the necessary
inputs for expanded domestic industries utilising basic plastics and industrial chemicals, thus contributing to the overall objective of economic diversification.”

Focus article by Nurluqman Suratman

Thumbnail picture: Borouge’s operations in Ruwais, Abu Dhabi (Source: Borouge)