KHALEEJ TIMES, Wednesday, Sep 2, 2020 | Muharram 14, 1442
Adnoc signs $5.5 billion real estate deal with Apollo-led consortium
Emirates:
Adnoc has entered into a $5.5 billion (Dh20.2 billion) real estate
investment partnership with a consortium led by Apollo Global Management.
Under the deal, Adnoc will unlock significant value from its non-oil and gas
infrastructure to reinvest into strategic growth projects. The transaction,
which will result in upfront proceeds of $2.7 billion (Dh9.9 billion) to Adnoc,
is expected to close by year-end.
Under the deal, the New York-based US private equity firm and its subsidiaries
will receive rental income streams from select Adnoc real estate assets over a
period of 24 years.
"Adnoc will maintain full ownership and control over its underlying real estate
assets," according to a tweet from Abu Dhabi Media Office on Wednesday.
Adnoc will retain a 51 per cent majority stake, maintaining full ownership and
control over the select real estate and social infrastructure assets, the
company said in a statement on Wednesday.
Under the real estate transaction, which Adnoc said was one of the region's
largest, Apollo led a consortium of institutional investors to acquire a 49 per
cent stake in Abu Dhabi Property Leasing Holding Company, which is a wholly
owned affiliate of Adnoc.
The company said the transaction has 'no financing' and was placed entirely with
insurance and pension fund investors focusing on long-term and high-quality
investments.
Minister of Industry and Advanced Technology and Adnoc Group CEO Dr Sultan Al
Jaber said this strategic partnership allows Adnoc to unlock and monetize
significant value from its non-oil and gas strategic infrastructure assets and
reinvest into our core business to deliver further growth and realise greater
returns.
"The innovative and flexible deal structure ensures Adnoc maintains full
ownership and control over its real estate assets, while further strengthening
our balance sheet and allowing for greater capital flexibility," Al Jaber said.
Leon Black, Apollo chairman, chief executive officer and founder, expressed his
pleasure to invest in Adnoc's real estate portfolio and said the strategic move
will be simultaneously supporting achievement of the company's strategic plans
while presenting its investors with a highly attractive risk-reward opportunity.
"Sourcing and structuring a long-term institutional investment of this nature is
demonstrative of Apollo's unique ability to embrace complexity and tailor
investments to a company's specific objectives. In a market where high-quality,
long-dated yield is scarce, this transaction allows our institutional and
insurance clients, including Athene, to participate in a proprietary investment
alongside a world-class company like Adnoc," Black said.
In June, Adnoc signed an agreement worth $20.7 billion (Dh75.96 billion) with a
consortium of the world's leading infrastructure and sovereign wealth funds to
invest in Abu Dhabi's natural gas pipeline ininfrastructure. It is the largest
deal in the energy sector this year so far.
Last year, Adnoc also signed a $5 (Dh18.35) billion oil pipelines deal with
leading global private equity players such as BlackRock and KKR.
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