The partnership establishes the UAE’s position as a preferred destination for attracting strategic foreign direct investment in the region and reflects the excellence and quality of ADNOC’s real estate assets.
– ADNOC benefits from the proceeds of part of its non-core assets to reinvest in projects and strategic growth initiatives for its core oil, gas and petrochemical businesses.
The agreement is a continuation of ADNOC’s strategy for smart growth, attracting foreign investments and concluding smart partnerships with prominent global investors, and comes on the heels of successful deals to invest in infrastructure assets.
ABU DHABI, 2 September, WAM – The Abu Dhabi National Oil Company (ADNOC) today announced the conclusion of a long-term partnership agreement with a consortium that includes a number of investment institutions led by Apollo Global Management Company (Apollo) listed on the New York Stock Exchange under the symbol / NYSE: APO / which is One of the world’s largest alternative investment management companies, to invest in ADNOC real estate assets worth 20 billion dirhams ($ 5.5 billion).
This partnership allows ADNOC to benefit from the rental income of a range of its real estate assets, under a lease agreement for a maximum term of 24 years. ADNOC will leverage the significant value of a group of its non-core real estate assets to attract new global capital to reinvest in support of strategic growth projects and initiatives in its core business in the oil and gas sector.
ADNOC has identified a group of its real estate assets and placed it under the umbrella of the Abu Dhabi Real Estate Leasing Holding Company Limited RSC / ADPLHC / its subsidiary, which owns long-term lease stakes in a large portfolio of ADNOC’s various real estate assets in Abu Dhabi.
Through negotiations with international investors, this group of real estate was valued at 20 billion dirhams, and it was agreed that the investment alliance led by “Apollo” would acquire a 49% stake in ADPLHC in one of the largest real estate deals in the region, and ADNOC would keep a stake. The majority of 51%, as well as full ownership of its real estate assets and the right to control and manage operations, operation and maintenance.
ADNOC will receive immediate returns of 10 billion dirhams / $ 2.7 billion / under the deal, which is expected to be completed in the fourth quarter of 2020 after obtaining regulatory approvals and fulfilling the required conditions.
On this occasion, His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and CEO of ADNOC and its Group of Companies said: “In line with the directives of the wise leadership, ADNOC is keen to enter into distinct partnerships that achieve the maximum possible value from its asset portfolio by attracting smart and innovative strategic investments. On this agreement with ‘Apollo Global Management’, which is one of the largest alternative investment management companies in the world, to benefit from their vast experience in real estate asset management, apply the best international standards in real estate management, and raise cost efficiency in our real estate assets portfolio.
His Excellency added: “This partnership provides ADNOC with cash from real estate assets not linked to its core business to reinvest in supporting and financing strategic growth projects and initiatives in its core oil and gas businesses.
The innovative and flexible structure of this partnership also allows ADNOC to attract global capital while retaining control and ownership of its real estate assets to support its financial performance and enhance its monetary flexibility. This partnership also benefits from ADNOC’s successful and distinguished track record in attracting leading global investment institutions to the UAE and Abu Dhabi and consolidating the UAE’s position as a preferred destination for investment in various circumstances, thanks to the reliable and stable environment and its distinguished legislative system. ”
This partnership will provide Apollo with a unique opportunity to invest in excellent real estate assets with low-risk returns, and to achieve stable and long-term cash flows from a portfolio of real estate assets belonging to one of the world’s most important credit-rating energy companies, which is expected to achieve strong occupancy and rental rates. . Apollo designed and structured the deal based on its ability to operate in various global markets and the extensive experience gained through its integrated investment platform, which includes investments in the real estate, infrastructure and insurance sectors.
Leon Black, President, CEO and Founder of Apollo, said: “We are delighted to invest in ADNOC’s real estate portfolio and contribute to supporting its strategic plans, while at the same time providing promising and low-risk opportunities for our investors. Implementing and structuring a long-term institutional investment in this distinct manner reflects the ability of ‘ Apollo ‘on adopting innovative strategies to design investment deals commensurate with the goals of our partners. “In a market where high-quality and long-term returns are scarce, this deal provides our institutional and insurance clients with the opportunity to participate in an equity investment alongside a global company such as ADNOC,” he added.
Since announcing in 2017 a proactive and flexible approach to managing its assets and expanding its program of strategic partnerships and joint investments with the aim of creating additional value for the UAE and Abu Dhabi .. ADNOC entered the global financial markets for the first time by issuing US $ 3 billion in bonds backed by the assets of the Abu Dhabi Crude Oil Pipeline. ADNOC successfully executed a public offering on a portion of ADNOC Distribution’s shares in the first ADNOC Distribution Company’s first listing, and entered into several strategic commercial partnerships through its companies in the fields of drilling, refining, fertilizers, commodity trading, products and derivatives, etc. ADNOC recently completed a strategic partnership. With a number of sovereign wealth funds and the world’s leading investment institutions to invest in pipelines for oil and gas transmission and distribution infrastructure.
The agreement, signed today, comes within the framework of ADNOC’s successful program to attract and implement joint investments in infrastructure and real estate assets and its continuous efforts to implement its strategy to create and increase value. Thanks to the excellence and quality of its real estate assets, ADNOC was able to attract major international companies to this alliance led by Apollo, which strengthens its position and pivotal role as a catalyst for responsible and sustainable investment and value creation for the UAE and Abu Dhabi.
HSBC acted as the financial advisor to ADNOC, while Mullis & Company acted as independent financial advisor to ADNOC.
The Abu Dhabi National Oil Company (ADNOC) is one of the world’s leading diversified energy and petrochemical groups. With 14 specialized subsidiary companies and a joint venture, ADNOC is a major catalyst for economic growth and diversification in the UAE. As for Apollo, it is one of the largest alternative investment management companies in the world and has a global presence with headquarters in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo. Apollo owns and manages assets of about $ 414 billion, as of June 30, 2020, in trust funds, private equity and real estate assets in nine major sectors in which Apollo has extensive experience and resources.