Borealis/Adnoc to float 10% stake of Borouge on ADX

Borealis AG (Borealis) and Abu Dhabi National Oil Company (Adnoc) intend to float a 10% stake in their joint venture company Borouge on the Abu Dhabi Securities Exchange (ADX).

Headquartered in Abu Dhabi, UAE, Borouge, a provider of polyolefin solutions, will float at least 3 billion shares on the market.

The offering will begin 23 May to 28 May for retail investors and 30 May for institutional buyers, the company said in an intention to float (ITF) document. It expects its shares to be admitted for trading on the ADX on 3 June.

After the offering, still subject to regulatory approval, Adnoc will own 54% of the company, while Borealis will own 36%. Currently, Adnoc holds 60% in Borouge ADP, with Borealis holding 40%. Both companies have a 50% shareholding in Borouge Pte.

“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,” said Sultan Al Jaber, Minister of Industry and Advanced Technology, and Adnoc Managing Director/Group CEO.

“This world-class business provides cutting-edge manufacturing, consumer and infrastructure solutions and offers innovative technologies. This latest offering will be open to all citizens and residents of the UAE in addition to qualified international and local institutional investors,” Al Jaber said.

Following the offering, the company expects to pay fixed dividends of us$325 million in September and US$650 million in March next year, both relating to the financial year 2022. For the fiscal 2023, it aims to pay a dividend of no less than US$1.3 billion.

However, the ability to pay dividends is dependent on a number of factors, such as the “availability of distributable reserves, the capital expenditure plans and market conditions”.

Established in 1998, Borouge consists of Borouge ADP (production company) and Borouge Pte (sales and marketing company). It employs more than 3,100 people and serves customers in more than 50 countries across Asia, the Middle East and Africa.

It provides polyolefin solutions for the agricultural, infrastructure, energy, advanced packaging, mobility and healthcare industries.

Borouge has a capacity of 4.5 million tonnes in Ruwais. Its portfolio includes PE and PP, which are used in a variety of products such as pipes, fittings, wires and cables and also have automotive, sustainable packaging, agricultural and medical applications.

Borouge’s first 450,000-tonne/year PE unit was commissioned in 2001, followed by Borouge 2 and 3, commissioned in 2010 and 2014, raising the capacity to 2 million tonnes/year and 4.5 million tonnes/year of PP and PE respectively.

Borouge 4, which was announced this year, will increase the company’s overall polyolefin production to 6.4 million tonnes, making it the world’s largest single-site polyolefin complex.

Adnoc had earlier said it would buy Mubadala Investment Company’s 25% stake in Borealis. The deal will allow the state-owned oil and gas producer to expand its international footprint in the fast-growing chemicals and petrochemical sector.

(PRA)

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