Abu Dhabi's ADNOC said to mull IPO of shipping business

State-run Abu Dhabi National Oil Co. (ADNOC) is mulling an initial public offering (IPO) of a minority stake in its shipping business as part of a broader strategy to attract more investments to the emirate, Bloomberg reported on Wednesday, citing unnamed sources with knowledge of the matter.

The oil producer had earlier announced plans to merge three maritime transport and service units, namely Abu Dhabi National Tanker Co. (Adnatco), with Petroleum Services Co. (Esnaad), and Abu Dhabi Petroleum Ports Operating Co. (Irshad).

The deal was scheduled to be finalized by the end of 2017.

When the merger is completed, ADNOC will decide whether to sell a minority stake in the new unit through an IPO.

The share sale, however, is not likely to go ahead before 2019, as the new entity would have to prove its attractiveness to investors, the sources added.

Meanwhile, Abu Dhabi does not plan to launch an IPO for ADNOC, the main holding company, the energy giant said in an emailed statement.

The company is expanding its partnerships and creating new investment opportunities.

“Adnoc is therefore considering the potential IPO of minority stakes of some of its services businesses which have attractive investment and growth,” the oil producer added.

Last July, ADNOC said it was planning an IPO of over a 10 percent stake in its fuel retailer, ADNOC Distribution.