Abu Dhabi investors to plough $200m into Borouge IPO

• Plastics maker set to list on Abu Dhabi Securities Exchange on June 3
• Alpha Dhabi Holding, IHC and Multiply Group plan to invest
• Offer price is 2.45 dirhams ($0.66) per share

Three Abu Dhabi companies have unveiled plans to invest in the initial public offering of Borouge, the joint venture between Abu Dhabi National Oil Company (Adnoc) and its Austrian chemicals partner Borealis.

Alpha Dhabi Holding, International Holding Company (IHC) and Multiply Group said on Monday that they would invest AED733 million ($200 million) between them.

Borouge, a specialty plastics firm that makes polyolefins used in products such as cars and food packaging, said its IPO would consist of approximately 3 billion existing shares, representing 10 percent of the company’s issued share capital. It is expected to list its shares on the Abu Dhabi Securities Exchange (ADX) on June 3. The offer price is 2.45 dirhams per share.

Alpha Dhabi’s AED367 million stake follows acquisitions and investments in Alpha Wave Ventures II Fund, Wio Bank and DEWA’s IPO. 

Hamad Al Ameri, CEO of Alpha Dhabi, said: “Over the last couple of years we have seen a significant development of Abu Dhabi capital markets and its ecosystem, which have become increasingly mature, dynamic and liquid. Alpha Dhabi’s investment in Borouge’s IPO is another example of our continued support in the ongoing development of regional capital markets.”

IHC is investing AED183 million. The Abu Dhabi-based company said it would make this investment at the IPO price and commit to invest across the entire IPO price range.

Syed Basar Shueb, CEO and managing director of IHC, said: “With growth across regional capital markets, namely the petrochemical sector, we are set to capitalise on this as cornerstone investor in Borouge. This investment directly aligns to our company ongoing focus in innovative clean-energy companies with resolute ESG principles that target the challenges of plastic waste recycling and generate long-term sustainability.”

Multiply Group, a technology-focused holding company, said it had agreed to purchase shares worth AED183.75 million. 

Samia Bouazza, CEO and managing director at Multiply Group, said: “Our investment underpins our confidence in the Abu Dhabi market which has maintained strong momentum in its capital market despite the ongoing global economic uncertainty. 

“We see this momentum continuing on the back of solid economic growth in Abu Dhabi and ADX’s growing depth, resilience and sophistication.”

Bouazza added: “There is real and tangible demand for the many types of innovative solutions being produced using the latest technologies by Borouge across different industries, such as healthcare, mobility, agriculture and infrastructure especially in developing countries where it is concentrating its next phase of expansion.”

The other cornerstone investors in the IPO are Asia’s richest billionaire Gautam Adani, Abu Dhabi’s ADQ, Abu Dhabi Pension Fund and the Emirates Investment Authority.

One of the world’s largest manufacturers of sustainably produced polymers, Borouge has increased its production by 10 times since 2001, reaching $5.5 billion in revenue in 2021. 

“We expect this growth to continue, on the back of global population growth and urbanisation, especially for recyclable solutions. This key focus on ESG principles is a very important factor in our own investment thesis,” said Bouazza.

Borouge has adopted a comprehensive sustainability agenda with a strong focus on promoting a zero-waste plastics circular economy. It aims to reduce its Scope 1 (direct greenhouse gas) emissions by 25 percent, its energy intensity by 30 percent and continuous flaring by 100 percent by 2030.

The IPO opened on Monday and will run to May 28 for retail investors and May 30 for institutional buyers. 

Borouge said it was planning to pay dividends to shareholders biannually, and ability to pay would depend on factors such as its capital expenditure plans, availability of distributable reserves and market conditions.