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OCI, Adnoc Push Ahead With IPO of Fertilizer Venture

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(Bloomberg) -- Chemical producer OCI NV and Abu Dhabi National Oil Co. are planning to list their Middle Eastern fertilizer venture as soon as October, people with knowledge of the matter said.

Advisers to the company, known as Fertiglobe, have been holding early meetings with potential investors and aim to announce plans for the initial public offering in the coming weeks, according to the people. Investors could be offered around a 10% to 15% stake in Fertiglobe through the IPO, the people said, asking not to be identified because the information is private.

Fertiglobe’s owners picked Morgan Stanley, Citigroup Inc., HSBC Holdings Plc and First Abu Dhabi Bank PJSC to work on the IPO, Bloomberg News reported in April. The potential share sale could value Fertiglobe at about $7 billion including debt, people with knowledge of the matter have said.

The IPO could benefit from the rebound in fertilizer prices, which have jumped in the past year as a crop rally helped farmers boost purchases of the nutrient. They’ve been further supported after Hurricane Ida struck the heart of the U.S. fertilizer industry and Storm Nicholas threatened more damage in the Gulf of Mexico.

At the same time, soaring energy prices in Europe have spread to the fertilizer industry, forcing companies including Yara International ASA and CF Industries Holdings Inc. to curtail some output. Fertiglobe has locked in gas supplies from producers in markets including Abu Dhabi and Egypt, giving it a potential advantage over some rivals in Europe, people familiar with the matter said.

Blue Hydrogen

OCI, which is backed by Egyptian billionaire Nassef Sawiris, has a 58% stake in Fertiglobe while Adnoc holds 42%. Deliberations are ongoing, and details of the potential share sale could still change, the people said. Representatives for Adnoc and OCI declined to comment.

Fertiglobe operates a fertilizer and chemical production facility in the Ruwais industrial complex, located along the Persian Gulf coast west of the city of Abu Dhabi. The company is a key part of plans by the United Arab Emirates to manufacture and export blue hydrogen, a fuel usually shipped in the form of ammonia.

The proposed listing comes as Abu Dhabi tries to revive IPOs on its bourse. Satellite operator Yahsat started trading in July, and sovereign wealth fund Mubadala Investment Co. is preparing for a listing of Emirates Global Aluminium that could value the business at more than $15 billion, people with knowledge of the matter have said.

In recent years, international and local funds have invested more than $20 billion in Adnoc assets such as pipelines and property. Last year, the company sold leasing rights over natural-gas pipelines to a consortium including Global Infrastructure Partners and Brookfield Asset Management Inc. in a deal worth $10.1 billion.

(Updates with potential valuation in third paragraph)

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