Abu Dhabi: Investor interest was strong on Wednesday as Abu Dhabi's state energy company listed a stake in its retail distribution arm, the first time the emirate has sold shares in one of its oil firms.
The Abu Dhabi National Oil Company said it had raised $845 million by floating 10 per cent of its subsidiary ADNOC Distribution, a landmark share offering as Gulf energy firms open up to outside investments.
The initial public offering price for the shares was at 2.5 dirhams (68 US cents) and by 0915 GMT they were trading at 73 cents. ADNOC said the IPO brought the subsidiary's market capitalisation to 8.5 billion, making it the fourth-largest firm on the Abu Dhabi Securities Exchange.
The statement said the IPO was oversubscribed several times and that 90 per cent of the shares were sold to institutional investors, a third of them international, and the rest to individual investors. Abu Dhabi, the UAE capital which holds more than 90 per cent of the country's 98 billion barrels of crude reserves, has never before offered public shares in one of its oil companies.
Hit hard by the sharp drop in oil prices, energy- dependent Gulf states have resorted to a string of reforms including hiking fuel and power prices, imposing taxes and selling off part of their strategic assets to raise funds.
Neighbouring oil kingpin Saudi Arabia is planning to eventually float up to five percent of its national oil company Aramco, in what many expect would be the biggest IPO in history. With 360 fuel stations and more than 235 stores, ADNOC Distribution is the UAE's largest operator of petrol stations and the sole retail fuel operator in the emirates of Abu Dhabi and Sharjah.