ADNOC, OCI announce intention to float on ADX

This offering is open to UAE citizens and residents, as well as domestic and international institutional investors. The offer is expected to open on 13th October, 2021, subject to regulatory approvals and other relevant considerations.

Fertiglobe is the world's largest seaborne exporter of urea and ammonia combined, the largest nitrogen fertiliser producer in the MENA region by production capacity, and an early mover in clean ammonia. It benefits from emerging potential future uses of ammonia as part of the nascent clean hydrogen economy, where clean ammonia could serve as an efficient energy carrier or as a clean fuel.

Formed in September 2019, Fertiglobe is a strategic partnership between OCI (58 percent) and ADNOC (42 percent), combining four strategically located production facilities across the MENA region, to create a single platform that has the largest net ammonia export production capacity in the region.

Through the potential offering, investors will be able to purchase shares in a key player in the global nitrogen fertiliser and ammonia sector with an attractive growth story and investment opportunity. Fertiglobe has a strong revenue profile and robust free cash flow conversion capabilities across commodity cycles, enabling long-term dividend potential. Additionally, investors will benefit from its value creation plans, including emerging opportunities in the low-carbon ammonia value chain and the hydrogen economy.

Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, ADNOC Managing Director and Group CEO and Fertiglobe Chairman, said, "The launch of Fertiglobe’s IPO follows the very recent and highly successful listing of ADNOC Drilling on the Abu Dhabi Securities Exchange, exemplifying ADNOC’s pivotal role in driving the growth and diversification of the nation’s economy, supporting the further development of the UAE’s private sector and equity capital markets, and attracting foreign direct investment into Abu Dhabi and the UAE, fully aligned with the recently announced UAE ‘Principles of the 50’."

He added, "The Offering will be the first listing of a free zone company onshore in the UAE, and is open to all citizens and residents of the UAE as well as local and international institutional investors in a number of countries. Fertiglobe offers a unique investment opportunity to access an increasingly critical global sector, while also benefiting from emerging opportunities in the low-carbon ammonia value chain and the hydrogen economy.

"ADNOC, like OCI, will remain a long-term and committed major shareholder in Fertiglobe and will continue to partner with the Company on emerging opportunities, including the development of a new state-of-the-art blue ammonia project at TA’ZIZ in Ruwais, Abu Dhabi."

Given its scale, Fertiglobe’s products play a vital role in the global agricultural process and supply chain, providing farmers with the essential element needed to meet the ever-increasing demand for crops and enabling Abu Dhabi and the UAE to make a meaningful contribution to global food security.

Nassef Sawiris, Executive Chairman of OCI NV and Vice Chairman of Fertiglobe, stated, "We are pleased to be announcing Fertiglobe’s intention to float on the ADX, which marks another milestone in Fertiglobe’s growth journey since its creation in 2019. As this partnership with ADNOC develops, Fertiglobe continues to show the multitude of benefits we envisaged when we created it and Fertiglobe is increasingly becoming the ideal platform to capture the opportunities offered by the emerging yet rapidly growing hydrogen economy and generate strong cash flows.

"As a pure play nitrogen and an early mover in clean ammonia, it enhances the visibility of Fertiglobe in the marketplace including its financial performance attributes that support a robust dividend capacity, commercial positioning, and unlocking of various strategic avenues of growth. Importantly, Fertiglobe continues to leverage key strengths from both ADNOC and OCI who have a shared vision of value creation and sustainable development."

Ahmed EL Hoshy, OCI NV CEO and Fertiglobe CEO, commented, "This is an exciting opportunity to introduce to the public markets a key player in the global nitrogen fertilizer and ammonia sector with an attractive growth story, and with the potential for attractive future dividends underpinned by a robust free cash flow profile throughout commodity cycles. We are well positioned to leverage a wide range of value creative opportunities. Not only does the IPO offer access to an increasingly critical global sector that ensures global food security, it is also supporting the global energy transition.

"Fertiglobe is an early mover in production of blue and green ammonia, which results in low or no carbon and has a myriad of uses as a hydrogen carrier and clean fuel, facilitating GHG reductions in industries that make up 80 percent of current global emissions. Ammonia is for instance emerging as a clean alternative to heavy fuel oil used in the hard-to-decarbonize shipping sector, where Fertiglobe is particularly well-positioned given its locations on global trade routes."

Fertiglobe’s production facilities in the UAE, Egypt and Algeria are strategically located at the crossroads of global trade enabling easy access to key importing markets, which combined with its customer strategy, enables superior unit economics compared to its peers.

The demand for low carbon ammonia is expected to increase from zero now to approximately 26 million tons in 2030, and 40 million tons in 2035. Earlier this year, ADNOC partnered with Fertiglobe to sell demonstration cargoes of blue ammonia to three customers in Japan.

In June 2021, Fertiglobe joined ADNOC and Abu Dhabi’s ADQ as a partner in a new world-scale 1 million Mtpa blue ammonia project at TA’ZIZ in Ruwais – a partnership that will strengthen the UAE’s low carbon ammonia value proposition. The partnership will focus on developing the first-of-its-kind large-scale blue ammonia project in the MENA region by building on the experience in carbon capture and storage of ADNOC and the ammonia capabilities of Fertiglobe. It is also exploring harnessing the region’s abundant solar and wind resources to produce green ammonia in Egypt.

In addition to developing its low-carbon ammonia capabilities, Fertiglobe is committed to decarbonisation by promoting energy efficiency and investing in low carbon initiatives, in order to meaningfully contribute to OCI’s stated emission reduction target of 20 percent by 2030.