The initial public offering of stock in materials maker Borouge plc is off to a fast start.
The stock debuted June 3 on the Abu Dhabi Securities exchange. The IPO raised more than $2 billion, Borouge officials said. Its final offer price of 2.45 Emirati dirhams per share ($0.67) gave the firm a market capitalization of a little more than $20 billion, making it the sixth largest company on the exchange, according to Borouge. The firm is a major producer of polyethylene and polypropylene resins and related feedstocks.
Borouge officials said the retail offering of the stock was oversubscribed 74 times and had more demand than any IPO in the United Arab Emirates in almost 20 years. They added that the IPO was the largest ever in Abu Dhabi and also was the largest-ever petrochemicals listing in the Middle East.
Borouge, founded in 1998, is a joint venture between Abu Dhabi National Oil Co. (ADNOC) and materials firm Borealis. Vienna-based Borealis employs 6,900 and posted sales of $7.7 billion in 2020. State-owned ADNOC ranks as one of the world's 10 largest oil and gas firms.
A 10 percent stake in Borouge was placed in the IPO. ADNOC owns 54 percent and Borealis holds 36 percent. In a news release, Borealis CEO Thomas Gangl said that the successful IPO "facilitates the expansion of the group and the ongoing efforts in providing innovative and differentiated polyolefin solutions."
Borouge Chairman Sultan Ahmed Al Jaber added that "as part of our ongoing value creation program, we will continue to unlock opportunities to expand our investor base and access to capital, while providing domestic and international investors with the opportunity to invest and partake in the growth of our world-class portfolio of energy assets."
Al Jaber also serves as UAE Minister of Industry and Advanced Technology and as managing director of ADNOC.
In November, Borouge announced a $6.2 billion investment in Borouge 4, a unit that will be able to produce more than 3 billion pounds of PE per year in Ruwais, UAE. The project includes a 3.3 billion pound capacity ethane cracker, two state-of-the-art Borstar-brand PE plants and a cross-linked PE plant. It's scheduled to be operational by the end of 2025.
Borouge materials are used in a range of products including industrial-grade pipes, cables, films and personal protective equipment. The first Borouge facility, making almost 1 billion pounds of PE, was commissioned in 2001. Borouge 2 and Borouge 3 took capacity to almost 10 billion pounds of PE and polypropylene by 2014. Borouge 4 will boost the site's annual PE/PP production to just over 14 billion pounds, making it the world's largest single-site polyolefin facility.