OCI Global announced the sale of its 50% stake in Fertiglobe to Abu Dhabi National Oil Company P.J.S.C. (ADNOC), fully exiting and monetizing its entire equity stake. Following completion of the transaction, ADNOC’s shareholding in Fertiglobe will increase to 86.2% while the free float traded on the Abu Dhabi Securities Exchange will remain at 13.8%.
The purchase price paid of AED 3.20 per share represents an 8% premium to Fertiglobe’s undisturbed price and a 25% premium to the price at Initial Public Offering (IPO). The purchase consideration additionally includes a two-year earn-out mechanism linked to free cash flow metrics and commodity pricing that may allow OCI to participate in future nitrogen market upside. OCI will convene an extraordinary general meeting of shareholders to request approval of the transaction in due course. All documents for the meeting will be made available at OCI Global website and at the meeting. The transaction is expected to close in 2024, subject to regulatory conditions and anti-trust approvals.
Separately, ADNOC and OCI have today announced a roadmap to explore opportunities for global strategic collaboration on future joint investments including but not limited to, development projects outside the Middle East in decarbonization and product distribution across North America and Europe. This roadmap builds upon the collaborative and successful partnership between ADNOC and OCI formed with the creation of Fertiglobe in 2019 and demonstrated by its successful landmark initial public offering in 2021.
Headquartered in Abu Dhabi, Fertiglobe was formed as a strategic partnership between OCI and ADNOC in September 2019, with a subsequent listing on the ADX in 2021. The value-added partnership created a first-mover innovative export platform with best-in-class cash conversion metrics throughout the commodity cycle. Fertiglobe today is the world’s largest seaborne exporter of ammonia. Since the IPO, Fertiglobe has returned $2.065 billion of dividends to shareholders and has been one of the best performers on the ADX on a Total Shareholder Return basis of more than 50%.
This transaction marks a transformative step for OCI and part of a multi-faceted strategic review aimed at unlocking value for shareholders. To date, OCI’s market valuation has not ascribed any value to the differentiated proposition of Fertiglobe’s strategically located assets, and the transaction underscores OCI’s commitment to reducing OCI’s HoldCo discount and crystalising value for its shareholders on a sum of the parts basis. The transaction materially deleverages OCI and provides flexibility for meaningful capital returns.
Nassef Sawiris, Vice Chairman of Fertiglobe and Executive Chairman of OCI commented: “Today marks a pivotal juncture in Fertiglobe’s journey with ADNOC, which began in 2018. Within the ADNOC Group, I am confident that Fertiglobe has found its optimal long-term home, and that with ADNOC’s continued support and guidance, significant value creation and exciting growth opportunities lie ahead. OCI looks forward to continuing to explore collaboration opportunities with ADNOC in the form of the global strategic alliance announced today, which will focus on value accretive growth projects outside the Middle East. Finally, with my private investment office NNS Group (“NNS”), I am pleased to announce that we will be investing in Fertiglobe, demonstrating NNS’s deep conviction and continued belief in the material value creation that lies ahead for Fertiglobe under ADNOC’s stewardship.”
Ahmed El Hoshy, CEO of OCI and CEO of Fertiglobe commented: “We are incredibly proud of Fertiglobe’s achievements since IPO and want to thank all the Fertiglobe employees who have contributed to this success. Today’s transaction is testament to their efforts and marks a strategic natural evolution in Fertiglobe’s journey to independence from OCI, and OCI’s journey to create long-term sustainable value for all its stakeholders. This transaction enhances OCI’s capacity to pursue value accretive opportunities in the energy transition space, whilst maintaining our commitment to an investment grade profile. Further, we look forward to exploring future cooperation opportunities with Fertiglobe and to continued collaboration with our long-standing partner ADNOC in the decarbonization and energy transition areas.”
Hassan Badrawi, CFO of OCI commented: “OCI continues to affirm its commitment to creation of value for our shareholders throughout its journey, underpinned by a prudent financial policy. With such meaningful proceeds, we will benefit from significant flexibility to tackle future opportunities, return capital to shareholders and maintain our investment grade profile.”
Source OCI Global