DMEA: Borouge IPO details emerge

In this week’s DMEA, we cover plans for the IPO of chemicals firm Borouge and Eskom’s fuel predicament.

Abu Dhabi National Oil Co. and Borealis this week announced plans for the initial public offering (IPO) of a 10% stake – 3bn shares – in their Borouge joint venture (JV), which will launch later this month on the ADX stock market.

While pricing for the sale has not been announced, reports suggest that the companies are aiming to achieve a valuation of $20bn for the plastics firm, netting a total of $2bn for the partners.

The news follows months of speculation, while in April, ADNOC bought 25% stake in Borealis from fellow Emirati firm Mubadala Investment Co. (MIC).

Following the IPO, ADNOC will hold a direct shareholding in Borouge, with Borealis retaining 36%, 9% of which is now indirectly attributable to ADNOC.

In a statement accompanying the release of the IPO documents, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and ADNOC managing director and group CEO, said: “Following the highly successful listings of ADNOC Distribution, ADNOC Drilling and Fertiglobe, ADNOC is bringing to the market a UAE-based, globally competitive market leader.”

The partners have said that Borouge expects to pay fixed dividends of $325mn in September and $650mn in March 2023 for the 2022 financial year, increasing this to a minimum pay-out of $1.3bn for FY2023.

Meanwhile, criticism has been levelled at South African power firm Eskom, which this week said that it had resorted to burning 40mn litres of diesel this month just to remain operational.

South Africa is struggling under a severe shortage of diesel and jet fuel, which has seen prices spike following refinery closures and issues with acquiring feedstock.