Goldman, JPMorgan, HSBC in competition as UAE’s ADNOC plans retail unit sale

Goldman Sachs, JPMorgan HSBC are in hot competition in the Middle East state of Abu Dhabi to play a lead role as the country’s national oil company weighs proposals from them in the listing of its retail business, according to sources, the news agency Reuters reported Wednesday.

Rothschild is in a strong position for an advisory role to the deal that could raise $1.5 to $2 billion for ADNOC, according to Reuters.

Beyond the Gulf region, oil companies are looking to raise capital and boost valuations in an era of cheap oil from listings or sales of retail units.

Plans to list some of ADNOC’s services also come as other Gulf states, such as Saudi Arabia and Oman, have embarked on privatising energy assets.

The listing of Abu Dhabi National Oil Co’s (ADNOC) Distribution business, which manages petrol stations as well as convenience stores across the United Arab Emirates (UAE), is planned before the end of the year, one of the sources told Reuters.

The company has a total number of 460 petrol stations after the opening up of several new ones since the start of the year, it said in a statement on Wednesday.

ADNOC’s listing could stir the UAE’s lackluster IPO scene from its recent slumber. There have been only two initial public offerings (IPOs) so far in 2017 in the UAE, raising $348.5 million, and none at all last year, Thomson Reuters data shows.

Other oil companies looking to raise money from listings of retail units include China Petroleum and Chemical Corp, which is planning to list its retail unit in Hong Kong and Thailand’s biggest energy company PTT which is examining a proposal to list its retail business.

The pitching process for the ADNOC deal is under way after the unlisted group announced this week that it is looking to float some of its services businesses and enter tie-ups with global investors to help it create new revenue streams and secure more market access.

Ten banks have been invited to pitch for a role in the IPO, one of the sources said. ADNOC declined to confirm details of the pitching process, but a spokesman told Reuters “central to ADNOC’s new approach is the more active management of its portfolio of assets and businesses.”

“ADNOC is therefore considering the IPO of minority stakes of some of its services businesses and we will update the market on its plans in due course,” the spokesman said.

Spokespeople for JPMorgan, HSBC, Goldman Sachs and Rothschild declined to comment. First Abu Dhabi Bank did not respond to a request for comment.

ADNOC has no plans to list the holding company. State-owned ADNOC produces around 3 million barrels of oil per day and manages 95 percent of UAE’s proven oil reserves and 92 percent of the country’s gas reserves.