Soaring Mideast Heat May Roil Oil Market as Demand Surges - Bloomberg
Soaring temperatures in one of the world’s top energy-producing regions could drive fuel prices higher as countries there burn more oil and natural gas to keep homes cool.
Saudi Arabia, the United Arab Emirates and Kuwait are all experiencing weather that’s hotter than normal. That has coincided with a tightened crude market, with the Organization of Petroleum Exporting Countries and its allies continuing to hold back millions of barrels of supply.
“Demand this summer will be stronger than last year,” Ahmed Mehdi, a Middle East analyst at the Oxford Institute for Energy Studies, said of the region.
Electricity consumption in OPEC member Kuwait this week surpassed its previous peak as the early onset of scorching heat prompted greater use of air conditioners. Iraq, which suffered crippling blackouts last summer, also relies on burning crude and fuel oil to keep its power plants running.
Temperatures in the oil-producing states around the Persian Gulf can reach 50 degrees Celsius (122 Fahrenheit) during the region’s steamiest months of July and August. Top OPEC producer Saudi Arabia burned as much as 25% more crude in its power plants last year and said at the time that it could use up to 1 million barrels a day to generate electricity.
Energy use rose across the region in 2020 as coronavirus lockdowns kept residents at home through the torrid summer months -- when many usually travel -- and the enduring restrictions mean many are still staying put.
Oil is currently trading around $70 a barrel as much of the world recovers from the pandemic and the OPEC+ alliance keeps barrels off the market. OPEC’s own analysis indicates that crude consumption is rising faster than supply, forcing buyers to pull barrels out of storage.
Gulf producers are using more natural gas for power as well, and as OPEC+ gradually restores oil output, countries like Saudi Arabia and Iraq are pumping more of the fuel that’s found together with the crude.
The Gulf states have taken steps to prepare for oppressive heat and to make their energy infrastructure more efficient -- and more profitable. Kuwait is set to start a liquefied natural gas import facility, while the United Arab Emirates connected its first nuclear power plant to the national grid this year.
For now, OPEC+ isn’t committing to more crude supply. The group decided at a meeting this month to go ahead with an already agreed output increase for July, but stopped short of allowing a further hike. That will leave Saudi Arabia and its neighbors buying more of what they’re producing without necessarily providing the market any extra slack.
“OPEC+ is still sitting on more than 5 million barrels a day of spare capacity, mostly in the Gulf and particularly Saudi Arabia,” said Carole Nakhle, chief executive officer of London-based consulting firm Crystol Energy. “The Saudis can do what they want,” though pumping more crude just to burn it for power isn’t their best option, she said.
Wednesday, 9 June 2021
China Southern Grid Is Said in Talks for $4 Billion Taqa Stake - Bloomberg
China Southern Grid Is Said in Talks for $4 Billion Taqa Stake - Bloomberg
China Southern Power Grid Co. is in talks to acquire about a 10% stake in Abu Dhabi National Energy Co., the oil-rich emirate’s biggest utility, people with knowledge of the matter said.
The Chinese state-owned firm is in discussions with banks about financing for the potential purchase, said the people, who asked not to be identified as the information is confidential. A 10% stake in the company, known as Taqa, could be worth about $4.2 billion based on its current share price.
If successful, the transaction would be the biggest overseas acquisition by a Chinese company this year, according to data compiled by Bloomberg.
Abu Dhabi has been working with an adviser as it considers selling a 10% holding in Taqa, Bloomberg News reported in April. Initial non-binding bids were expected to be submitted in May, people with knowledge of the matter have said.
While negotiations are ongoing, there’s no certainty that China Southern Power Grid will reach an agreement and another buyer could still emerge, the people said.
Taqa referred queries to its controlling shareholder, Abu Dhabi sovereign wealth fund ADQ. A representative for ADQ wasn’t immediately available to comment, while a spokesperson for China Southern Power Grid didn’t immediately respond to a request for comment.
Abu Dhabi, the capital of the United Arab Emirates, has been seeking to attract foreign capital by selling stakes in some of its largest companies. In recent years, international and local funds have invested more than $20 billion in the operations of state-owned Abu Dhabi National Oil Co.
The Abu Dhabi government has been pushing to turn Taqa, which has a monopoly on power and water distribution in the emirate, into a regional utility champion. Last year, it orchestrated a plan for Taqa to receive assets from state-owned holding company Abu Dhabi Power Corp., known as ADPower, in return for stock.
Taqa’s plans to cut exposure to oil and natural gas assets and focus on renewables also appeal to international investors. The company wants to boost the portion of its power produced from solar and wind to 30% over the next decade. Taqa already owns one of the world’s biggest solar plants in Abu Dhabi and is in the process of building an even larger one.
China Southern Power Grid Co. is in talks to acquire about a 10% stake in Abu Dhabi National Energy Co., the oil-rich emirate’s biggest utility, people with knowledge of the matter said.
The Chinese state-owned firm is in discussions with banks about financing for the potential purchase, said the people, who asked not to be identified as the information is confidential. A 10% stake in the company, known as Taqa, could be worth about $4.2 billion based on its current share price.
If successful, the transaction would be the biggest overseas acquisition by a Chinese company this year, according to data compiled by Bloomberg.
Abu Dhabi has been working with an adviser as it considers selling a 10% holding in Taqa, Bloomberg News reported in April. Initial non-binding bids were expected to be submitted in May, people with knowledge of the matter have said.
While negotiations are ongoing, there’s no certainty that China Southern Power Grid will reach an agreement and another buyer could still emerge, the people said.
Taqa referred queries to its controlling shareholder, Abu Dhabi sovereign wealth fund ADQ. A representative for ADQ wasn’t immediately available to comment, while a spokesperson for China Southern Power Grid didn’t immediately respond to a request for comment.
Abu Dhabi, the capital of the United Arab Emirates, has been seeking to attract foreign capital by selling stakes in some of its largest companies. In recent years, international and local funds have invested more than $20 billion in the operations of state-owned Abu Dhabi National Oil Co.
The Abu Dhabi government has been pushing to turn Taqa, which has a monopoly on power and water distribution in the emirate, into a regional utility champion. Last year, it orchestrated a plan for Taqa to receive assets from state-owned holding company Abu Dhabi Power Corp., known as ADPower, in return for stock.
Taqa’s plans to cut exposure to oil and natural gas assets and focus on renewables also appeal to international investors. The company wants to boost the portion of its power produced from solar and wind to 30% over the next decade. Taqa already owns one of the world’s biggest solar plants in Abu Dhabi and is in the process of building an even larger one.
Oil steadies amid weak summer kickoff for U.S. fuel demand | Reuters
Oil steadies amid weak summer kickoff for U.S. fuel demand | Reuters
Oil prices were steady on Wednesday after U.S. inventory data showed a surge in gasoline inventories due to weak fuel demand following U.S. Memorial Day weekend, traditionally the beginning of the peak summer driving season.
Brent crude futures remained unchanged to settle at $72.22 a barrel, having earlier touched $72.83, their highest since May 20, 2019.
U.S. West Texas Intermediate (WTI) crude closed 9 cents, or 0.1%, lower at $69.96 a barrel, after reaching $70.62, its highest since Oct. 17, 2018.
Despite a 5 million-barrel draw in crude oil last week, stocks of gasoline and other fuels rose sharply due to weak demand, according to Energy Information Administration data for the week that included the long Memorial Day holiday weekend. Product supplied fell to 17.7 million barrels per day, versus 19.1 million the week before.
Oil prices were steady on Wednesday after U.S. inventory data showed a surge in gasoline inventories due to weak fuel demand following U.S. Memorial Day weekend, traditionally the beginning of the peak summer driving season.
Brent crude futures remained unchanged to settle at $72.22 a barrel, having earlier touched $72.83, their highest since May 20, 2019.
U.S. West Texas Intermediate (WTI) crude closed 9 cents, or 0.1%, lower at $69.96 a barrel, after reaching $70.62, its highest since Oct. 17, 2018.
Despite a 5 million-barrel draw in crude oil last week, stocks of gasoline and other fuels rose sharply due to weak demand, according to Energy Information Administration data for the week that included the long Memorial Day holiday weekend. Product supplied fell to 17.7 million barrels per day, versus 19.1 million the week before.
GlobalFoundries Said to Add JPMorgan, BofA to Jumbo IPO Roster - Bloomberg
GlobalFoundries Said to Add JPMorgan, BofA to Jumbo IPO Roster - Bloomberg
GlobalFoundries has added four more banks to work on a planned initial public offering that could value the chipmaker at about $30 billion, according to people familiar with the matter.
JPMorgan Chase & Co. and Bank of America Corp. have been brought in to help take the business public alongside already-appointed Morgan Stanley, the people said, asking not to be identified discussing confidential information. Citigroup Inc. and Credit Suisse Group AG have also been handed more junior roles on the listing, the people said.
GlobalFoundries is backed by the Abu Dhabi’s sovereign fund Mubadala Investment Co., which has started preparations for a U.S. IPO of the business and last month appointed Morgan Stanley to work on the plans, Bloomberg News reported.
Representatives for Bank of America, Citigroup, Credit Suisse, GlobalFoundries and JPMorgan declined to comment. A representative for Mubadala couldn’t immediately provide comment.
The chipmaker is coming to market as numerous industries complain they can’t get enough semiconductor supply as governments across the globe gear up to provide financial support for expansions in production. GlobalFoundries’ biggest rivals, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics, are struggling to keep up with demand.
GlobalFoundries was created when Mubadala bought Advanced Micro Devices Inc.’s manufacturing facilities in 2009 and later combined them with Singapore’s Chartered Semiconductor Manufacturing Ltd.
GlobalFoundries has added four more banks to work on a planned initial public offering that could value the chipmaker at about $30 billion, according to people familiar with the matter.
JPMorgan Chase & Co. and Bank of America Corp. have been brought in to help take the business public alongside already-appointed Morgan Stanley, the people said, asking not to be identified discussing confidential information. Citigroup Inc. and Credit Suisse Group AG have also been handed more junior roles on the listing, the people said.
GlobalFoundries is backed by the Abu Dhabi’s sovereign fund Mubadala Investment Co., which has started preparations for a U.S. IPO of the business and last month appointed Morgan Stanley to work on the plans, Bloomberg News reported.
Representatives for Bank of America, Citigroup, Credit Suisse, GlobalFoundries and JPMorgan declined to comment. A representative for Mubadala couldn’t immediately provide comment.
The chipmaker is coming to market as numerous industries complain they can’t get enough semiconductor supply as governments across the globe gear up to provide financial support for expansions in production. GlobalFoundries’ biggest rivals, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics, are struggling to keep up with demand.
GlobalFoundries was created when Mubadala bought Advanced Micro Devices Inc.’s manufacturing facilities in 2009 and later combined them with Singapore’s Chartered Semiconductor Manufacturing Ltd.
Israeli Startups Break Record With $10.5 Billion Raised in 2021 - Bloomberg
Israeli Startups Break Record With $10.5 Billion Raised in 2021 - Bloomberg
Israeli startups have raised $10.5 billion so far this year, surpassing the record set in 2020, as investors continue to pour cash into technology firms emerging as winners from the pandemic.
There have been 30 funding rounds of at least $100 million in the first half of this year, accounting for 53% of the total financing, according to a report from Start-Up Nation Central, a non-profit organization that tracks Israel’s tech industry. That compares with 21 such rounds last year.
The three sectors that dominated this year were companies in enterprise software, fintech and cyber security, said Uri Gabai, the incoming head of Start-Up Nation Central’s Research and Policy Institute.
“Unless something dramatic happens, we’re going to see figures we thought were unthinkable two years ago,” said Gabai, adding that $20 billion this year is plausible.
Israeli startups have raised $10.5 billion so far this year, surpassing the record set in 2020, as investors continue to pour cash into technology firms emerging as winners from the pandemic.
There have been 30 funding rounds of at least $100 million in the first half of this year, accounting for 53% of the total financing, according to a report from Start-Up Nation Central, a non-profit organization that tracks Israel’s tech industry. That compares with 21 such rounds last year.
The three sectors that dominated this year were companies in enterprise software, fintech and cyber security, said Uri Gabai, the incoming head of Start-Up Nation Central’s Research and Policy Institute.
“Unless something dramatic happens, we’re going to see figures we thought were unthinkable two years ago,” said Gabai, adding that $20 billion this year is plausible.
MIDEAST STOCKS Most major markets end higher on oil price gains; #Dubai dips | Reuters
MIDEAST STOCKS Most major markets end higher on oil price gains; Dubai dips | Reuters
Most major Gulf stock markets finished higher on Wednesday as oil prices rose, while real estate stocks pressured Dubai to close lower.
Brent crude futures were up 32 cents, or 0.3%, at $72.42 a barrel at 0911 GMT, having earlier touched $72.83, the highest since May 20, 2019. Brent rose 1% on Tuesday. read more
Saudi Arabia's benchmark index (.TASI) was up 0.5% with Al Rajhi Bank (1120.SE) gaining 0.8% and Savola Group rising (2050.SE) 3.6%.
In Abu Dhabi, the index (.ADI) ended 0.6% higher as Abu Dhabi Commercial Bank (ADCB) (ADCB.AD) jumped 3.2% and Abu Dhabi National Hotels Company (ADNH) (ADNH.AD) surged 14.8% after Abu Dhabi state-owned ADQ submitted an offer to combine Abu Dhabi National Exhibitions Company (ADNEC) with ADNH.
The lender ADCB rose for a second day after it received on Tuesday an amended offer for its stake in Alexandria Medical Services (AMES.CA), whereby the potential buyer increased the offer price to 700 million Egyptian pounds ($44.73 million) from 650 million offered earlier.
Qatar's index (.QSI), rose 0.2%, snapping four consecutive sessions losses, with petrochemical maker Industries Qatar (IQCD.QA) gaining 0.6% and Qatar Aluminum Manufacturing (QAMC.QA) increasing 4.5%.
Pressured by its property stocks, Dubai's index (.DFMGI), however, eased 0.1% as Emaar Properties (EMAR.DU) and unit Emaar Malls (EMAA.DU) dropped 1%, while Damac Properties (DAMAC.DU) lost 1.5%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 0.8% higher as the country's largest lender, Commercial International Bank, (COMI.CA) rose 1%, and Fawry For Banking Technology and Electronic Payment (FWRY.CA) advanced 1.2%.
Brent crude futures were up 32 cents, or 0.3%, at $72.42 a barrel at 0911 GMT, having earlier touched $72.83, the highest since May 20, 2019. Brent rose 1% on Tuesday. read more
Saudi Arabia's benchmark index (.TASI) was up 0.5% with Al Rajhi Bank (1120.SE) gaining 0.8% and Savola Group rising (2050.SE) 3.6%.
In Abu Dhabi, the index (.ADI) ended 0.6% higher as Abu Dhabi Commercial Bank (ADCB) (ADCB.AD) jumped 3.2% and Abu Dhabi National Hotels Company (ADNH) (ADNH.AD) surged 14.8% after Abu Dhabi state-owned ADQ submitted an offer to combine Abu Dhabi National Exhibitions Company (ADNEC) with ADNH.
The lender ADCB rose for a second day after it received on Tuesday an amended offer for its stake in Alexandria Medical Services (AMES.CA), whereby the potential buyer increased the offer price to 700 million Egyptian pounds ($44.73 million) from 650 million offered earlier.
Qatar's index (.QSI), rose 0.2%, snapping four consecutive sessions losses, with petrochemical maker Industries Qatar (IQCD.QA) gaining 0.6% and Qatar Aluminum Manufacturing (QAMC.QA) increasing 4.5%.
Pressured by its property stocks, Dubai's index (.DFMGI), however, eased 0.1% as Emaar Properties (EMAR.DU) and unit Emaar Malls (EMAA.DU) dropped 1%, while Damac Properties (DAMAC.DU) lost 1.5%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 0.8% higher as the country's largest lender, Commercial International Bank, (COMI.CA) rose 1%, and Fawry For Banking Technology and Electronic Payment (FWRY.CA) advanced 1.2%.
World’s Third-Biggest Wealth Fund Joins Medline Buyout Group - Bloomberg
World’s Third-Biggest Wealth Fund Joins Medline Buyout Group - Bloomberg
Abu Dhabi Investment Authority is joining one of the biggest leveraged buyouts of all time by investing about $1 billion alongside a consortium acquiring medical supply company Medline Industries Inc.
The world’s third-biggest wealth fund, known as ADIA, will back the takeover of Medline by Blackstone Group Inc., Carlyle Group Inc. and Hellman & Friedman, according to people familiar with the matter, who asked not to be identified discussing confidential information. Singapore’s state-owned investor GIC Pte is also investing in the deal, which values Medline at more than $30 billion.
A spokesperson for ADIA confirmed the investment in response to Bloomberg queries. Abu Dhabi’s rainy-day fund has amassed just under $700 billion in assets, according to estimates from Global SWF and the SWF Institute, with a mandate to funnel the government’s oil surplus into foreign holdings.
Medline is the biggest private U.S. manufacturer and distributor of medical supplies like gloves, gowns and exam tables to hospitals and doctor’s offices. The private equity consortium beat out Canadian investment giant Brookfield Asset Management Inc., which was bidding on its own, to acquire the business.
ADIA has been seeking to take advantage of the relationship it enjoys as a backer of some of the world’s larger buyout firms and join in on more deals. Last year, it agreed to invest along with Advent International and Cinven on their $19 billion buyout of Thyssenkrupp AG’s elevator unit. The fund was part of a consortium that bought Nestle SA’s $10 billion skincare business in 2019.
It’s also ADIA’s second health-care deal in quick succession. In May it took a minority stake in health-care software provider Dedalus Holding from private equity company Ardian.
The sovereign fund has been building out its own team of private equity professionals, which allows it to make more of its own direct investments. This month, it added another senior hire to its in-house data analysis and artificial intelligence team, set up to develop new investment strategies.
Abu Dhabi Investment Authority is joining one of the biggest leveraged buyouts of all time by investing about $1 billion alongside a consortium acquiring medical supply company Medline Industries Inc.
The world’s third-biggest wealth fund, known as ADIA, will back the takeover of Medline by Blackstone Group Inc., Carlyle Group Inc. and Hellman & Friedman, according to people familiar with the matter, who asked not to be identified discussing confidential information. Singapore’s state-owned investor GIC Pte is also investing in the deal, which values Medline at more than $30 billion.
A spokesperson for ADIA confirmed the investment in response to Bloomberg queries. Abu Dhabi’s rainy-day fund has amassed just under $700 billion in assets, according to estimates from Global SWF and the SWF Institute, with a mandate to funnel the government’s oil surplus into foreign holdings.
Medline is the biggest private U.S. manufacturer and distributor of medical supplies like gloves, gowns and exam tables to hospitals and doctor’s offices. The private equity consortium beat out Canadian investment giant Brookfield Asset Management Inc., which was bidding on its own, to acquire the business.
ADIA has been seeking to take advantage of the relationship it enjoys as a backer of some of the world’s larger buyout firms and join in on more deals. Last year, it agreed to invest along with Advent International and Cinven on their $19 billion buyout of Thyssenkrupp AG’s elevator unit. The fund was part of a consortium that bought Nestle SA’s $10 billion skincare business in 2019.
It’s also ADIA’s second health-care deal in quick succession. In May it took a minority stake in health-care software provider Dedalus Holding from private equity company Ardian.
The sovereign fund has been building out its own team of private equity professionals, which allows it to make more of its own direct investments. This month, it added another senior hire to its in-house data analysis and artificial intelligence team, set up to develop new investment strategies.
NMC's non-core asset sale plan still on despite creditors taking control | Reuters
NMC's non-core asset sale plan still on despite creditors taking control | Reuters
Hospital operator NMC will proceed with the sale of non-core international assets despite the planned transfer of the company’s business to creditors following a restructuring exercise, its joint administrators said.
The statement came after joint administrators from Alvarez & Marsal said earlier this week it will shortly launch the formal voting process to complete the financial restructuring of the NMC business, ensuring its exit from administration in Abu Dhabi.
“The sale process of the non-core international assets is proceeding and we hope to be able to make more formal announcements on these soon,” Richard Fleming, the joint administrator said in an email on Wednesday.
NMC’s core assets are in the United Arab Emirates and Oman. In December last year it agreed to sell Spain-based fertility business Eugin Group. Its also owns Aspen Healthcare, a small private hospital chain in the UK, and has a joint venture in Saudi Arabia with seven facilities.
A source said creditors would take a decision later concerning the planned sale process for the core business in the UAE and Oman.
NMC, which was founded by Indian businessman BR Shetty in the mid-1970s, became the largest private healthcare provider in the UAE but ran into trouble after short-seller Muddy Waters questioned its financial reporting and doubts emerged over the size of stakes owned by its biggest shareholders.
NMC also disclosed more than $4 billion in hidden debt, which led to the London-listed NMC Health being put into administration in April last year.
Later UAE operating businesses were placed into administration in the courts of Abu Dhabi’s international financial centre ADGM.
Hospital operator NMC will proceed with the sale of non-core international assets despite the planned transfer of the company’s business to creditors following a restructuring exercise, its joint administrators said.
The statement came after joint administrators from Alvarez & Marsal said earlier this week it will shortly launch the formal voting process to complete the financial restructuring of the NMC business, ensuring its exit from administration in Abu Dhabi.
“The sale process of the non-core international assets is proceeding and we hope to be able to make more formal announcements on these soon,” Richard Fleming, the joint administrator said in an email on Wednesday.
NMC’s core assets are in the United Arab Emirates and Oman. In December last year it agreed to sell Spain-based fertility business Eugin Group. Its also owns Aspen Healthcare, a small private hospital chain in the UK, and has a joint venture in Saudi Arabia with seven facilities.
A source said creditors would take a decision later concerning the planned sale process for the core business in the UAE and Oman.
NMC, which was founded by Indian businessman BR Shetty in the mid-1970s, became the largest private healthcare provider in the UAE but ran into trouble after short-seller Muddy Waters questioned its financial reporting and doubts emerged over the size of stakes owned by its biggest shareholders.
NMC also disclosed more than $4 billion in hidden debt, which led to the London-listed NMC Health being put into administration in April last year.
Later UAE operating businesses were placed into administration in the courts of Abu Dhabi’s international financial centre ADGM.
#Kuwait's Ahli United Bank gives initial guidance for AT1 sukuk -document | Reuters
Kuwait's Ahli United Bank gives initial guidance for AT1 sukuk -document | Reuters
Kuwait's Ahli United Bank (BKME.KW) has given initial price guidance of around 4.375% for Additional Tier 1 U.S. dollar-denominated sukuk that will be non-callable for 5-1/2 years, a document showed on Wednesday.
Kuwait's Ahli United, nearly three-quarters owned by Bahrain's Ahli United Bank (AUBB.BH), hired Citi (C.N), HSBC (HSBA.L), Standard Chartered (STAN.L), Abu Dhabi Islamic Bank (ADIB.AD), Kamco Invest (KAMC.KW), KFH Capital (KFH.KW) and Kuwait International Bank (KIBK.KW) to arrange the deal, which is expected to launch later in the day, the document from one of banks on the deal showed.
Additional Tier 1 (AT1) bonds, the riskiest debt instruments banks can issue, are designed to be perpetual in nature, but issuers can call them after a specified period.
Kuwait's Ahli United Bank (BKME.KW) has given initial price guidance of around 4.375% for Additional Tier 1 U.S. dollar-denominated sukuk that will be non-callable for 5-1/2 years, a document showed on Wednesday.
Kuwait's Ahli United, nearly three-quarters owned by Bahrain's Ahli United Bank (AUBB.BH), hired Citi (C.N), HSBC (HSBA.L), Standard Chartered (STAN.L), Abu Dhabi Islamic Bank (ADIB.AD), Kamco Invest (KAMC.KW), KFH Capital (KFH.KW) and Kuwait International Bank (KIBK.KW) to arrange the deal, which is expected to launch later in the day, the document from one of banks on the deal showed.
Additional Tier 1 (AT1) bonds, the riskiest debt instruments banks can issue, are designed to be perpetual in nature, but issuers can call them after a specified period.
UPDATE 1- #Saudi Aramco seen raising $3 bln-4 bln with dollar sukuk - sources | Reuters
UPDATE 1-Saudi Aramco seen raising $3 bln-4 bln with dollar sukuk - sources | Reuters
Saudi Arabian oil giant Aramco is likely to raise between $3 billion and $4 billion on Wednesday, two sources said, as it returns to the international debt markets with its first U.S. dollar-denominated sukuk sale.
The debt issuance, which will at least partly fund a large dividend that mostly goes to the government, will comprise tranches of three, five and 10 years, the term sheet for the sukuk seen by Reuters showed.
Initial price guidance was around 105 basis points (bps) over U.S. Treasuries (UST) for the three-year portion, around 125 bps over UST for the five-year paper and around 160 bps over UST for the 10-year bonds.
Aramco last year maintained a promised $75 billion dividend to shareholders - chiefly the government - despite lower oil prices, and is expected to shoulder significant domestic investments in Saudi Arabia’s plans to transform the economy.
The company chose to issue Islamic bonds over conventional ones due to high demand for the instrument as a result of the low number of dollar sukuk sales in the Gulf this year, a source told Reuters on Monday.
Aramco has been widely expected to become a regular bond issuer after its debut $12 billion issuance in 2019 was followed by an $8 billion, five-part transaction in November last year, also used to fund its dividend.
A source had told Reuters that Aramco was expected to raise up to $5 billion with the deal, which is expected to close later on Wednesday and has 29 active and passive bookrunners working on it.
Active bookrunners on the deal include HSBC, JPMorgan, NCB Capital and Standard Chartered Bank. Passive bookrunners include BOC International and Dubai Islamic Bank.
Saudi Arabian oil giant Aramco is likely to raise between $3 billion and $4 billion on Wednesday, two sources said, as it returns to the international debt markets with its first U.S. dollar-denominated sukuk sale.
The debt issuance, which will at least partly fund a large dividend that mostly goes to the government, will comprise tranches of three, five and 10 years, the term sheet for the sukuk seen by Reuters showed.
Initial price guidance was around 105 basis points (bps) over U.S. Treasuries (UST) for the three-year portion, around 125 bps over UST for the five-year paper and around 160 bps over UST for the 10-year bonds.
Aramco last year maintained a promised $75 billion dividend to shareholders - chiefly the government - despite lower oil prices, and is expected to shoulder significant domestic investments in Saudi Arabia’s plans to transform the economy.
The company chose to issue Islamic bonds over conventional ones due to high demand for the instrument as a result of the low number of dollar sukuk sales in the Gulf this year, a source told Reuters on Monday.
Aramco has been widely expected to become a regular bond issuer after its debut $12 billion issuance in 2019 was followed by an $8 billion, five-part transaction in November last year, also used to fund its dividend.
A source had told Reuters that Aramco was expected to raise up to $5 billion with the deal, which is expected to close later on Wednesday and has 29 active and passive bookrunners working on it.
Active bookrunners on the deal include HSBC, JPMorgan, NCB Capital and Standard Chartered Bank. Passive bookrunners include BOC International and Dubai Islamic Bank.
Aramco Starts Debut Sale of Dollar-Denominated Islamic Bonds - Bloomberg
Aramco Starts Debut Sale of Dollar-Denominated Islamic Bonds - Bloomberg
Saudi Aramco, the world’s biggest energy company, started marketing its first dollar-denominated Islamic bond sale.
The state-controlled company is offering sukuk due in three, five and 10 years, according to a person familiar with the matter, who asked not to be identified as the details are private.
The firm is raising cash to help finance its plans to pay out $75 billion in dividends, a commitment that the oil company made to garner support for its initial public offering. Aramco had to reduce spending, cut jobs and sell non-core assets as the spread of the coronavirus and widespread lockdowns curbed demand for oil last year, the main source of revenue for Saudi Arabia.
The price of Brent crude has rebounded, after plummeting to a 21-year low of just below $16 a barrel at one point in 2020. It’s since climbed more than four-fold to over $70 a barrel.
And while Aramco’s first-quarter profits soared -- thanks to the recovery in both crude and gas -- its free cash flow fell short of the $18.75 billion needed to pay the dividend for the period.
Aramco’s oil revenue accounts for about 40% of Saudi Arabia’s gross domestic product and the recent increase in crude prices may drive this even higher, Bloomberg Intelligence analysts Jaimin Patel and Damian Sassower wrote in a note Tuesday. Saudi Arabia’s plans to reduce its dependence on Aramco will be challenged by the nation’s fiscal deficit, they said.
Saudi Aramco, the world’s biggest energy company, started marketing its first dollar-denominated Islamic bond sale.
The state-controlled company is offering sukuk due in three, five and 10 years, according to a person familiar with the matter, who asked not to be identified as the details are private.
The firm is raising cash to help finance its plans to pay out $75 billion in dividends, a commitment that the oil company made to garner support for its initial public offering. Aramco had to reduce spending, cut jobs and sell non-core assets as the spread of the coronavirus and widespread lockdowns curbed demand for oil last year, the main source of revenue for Saudi Arabia.
The price of Brent crude has rebounded, after plummeting to a 21-year low of just below $16 a barrel at one point in 2020. It’s since climbed more than four-fold to over $70 a barrel.
And while Aramco’s first-quarter profits soared -- thanks to the recovery in both crude and gas -- its free cash flow fell short of the $18.75 billion needed to pay the dividend for the period.
Aramco’s oil revenue accounts for about 40% of Saudi Arabia’s gross domestic product and the recent increase in crude prices may drive this even higher, Bloomberg Intelligence analysts Jaimin Patel and Damian Sassower wrote in a note Tuesday. Saudi Arabia’s plans to reduce its dependence on Aramco will be challenged by the nation’s fiscal deficit, they said.
Oil prices climb on signs of strong fuel demand recovery | Reuters
Oil prices climb on signs of strong fuel demand recovery | Reuters
Oil prices rose for a second session on Wednesday on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted.
Brent crude futures were up 32 cents, or 0.4%, at $72.54 a barrel at 0640 GMT, having earlier touched $72.83, the highest since May 20, 2019. Brent rose 1% on Tuesday.
U.S. West Texas Intermediate (WTI) crude futures climbed 31 cents, or 0.4%, to $70.36 a barrel, after rising to as high as $70.62, highest since Oct. 17, 2018. WTI prices climbed 1.2% on Tuesday.
"Improved demand outlook appears to be bolstering crude oil prices, as the successful vaccine rollouts and summer driving season in the United States and Europe continues to support fuel demand," said Margaret Yang, a strategist at Singapore-based DailyFX.
Oil prices rose for a second session on Wednesday on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted.
Brent crude futures were up 32 cents, or 0.4%, at $72.54 a barrel at 0640 GMT, having earlier touched $72.83, the highest since May 20, 2019. Brent rose 1% on Tuesday.
U.S. West Texas Intermediate (WTI) crude futures climbed 31 cents, or 0.4%, to $70.36 a barrel, after rising to as high as $70.62, highest since Oct. 17, 2018. WTI prices climbed 1.2% on Tuesday.
"Improved demand outlook appears to be bolstering crude oil prices, as the successful vaccine rollouts and summer driving season in the United States and Europe continues to support fuel demand," said Margaret Yang, a strategist at Singapore-based DailyFX.
#AbuDhabi Fund ADQ Offers to Create Large Hospitality Group - Bloomberg
Abu Dhabi Fund ADQ Offers to Create Large Hospitality Group - Bloomberg
Abu Dhabi sovereign investment fund ADQ has submitted an offer to create a company with $5.4 billion in assets in a “strategic combination” of two local hospitality groups, part of an effort to form a larger entity that will support the emirate’s long-term diversification plans.
ADQ has proposed combining Abu Dhabi National Hotels Company PJSC with one of its portfolio companies, Abu Dhabi National Exhibitions Company PJSC, according to a statement on Wednesday. ADNH shares jumped as much as 15% on Wednesday, the maximum allowed by the local exchange, and headed for the highest closing price since 2010.
The proposed transaction “would create one of the largest hospitality, events, and catering powerhouses in the region” and would help attract more tourism and business travel to the emirate, ADQ said.
Abu Dhabi sovereign investment fund ADQ has submitted an offer to create a company with $5.4 billion in assets in a “strategic combination” of two local hospitality groups, part of an effort to form a larger entity that will support the emirate’s long-term diversification plans.
ADQ has proposed combining Abu Dhabi National Hotels Company PJSC with one of its portfolio companies, Abu Dhabi National Exhibitions Company PJSC, according to a statement on Wednesday. ADNH shares jumped as much as 15% on Wednesday, the maximum allowed by the local exchange, and headed for the highest closing price since 2010.
The proposed transaction “would create one of the largest hospitality, events, and catering powerhouses in the region” and would help attract more tourism and business travel to the emirate, ADQ said.
- The combined group would have assets of approximately $5.4 billion as of Dec. 31 2020, including a portfolio of 28 owned and operated hotels, three large exhibition centers in Abu Dhabi, Al Ain and London, in addition to catering companies and food and beverage outlets
- The combined group would be well-positioned for revenue growth opportunities and cost synergies, along with a stronger, more efficient capital structure. The transaction is expected to be “earnings accretive shortly after completion”
- ADNH will issue to ADQ a convertible instrument that would convert into 1,221,374,045 ordinary shares in the capital of ADNH upon closing of the transaction. The price at which the instrument will convert into shares in ADNH is 3.93 dirhams per share.
- The offer implies an equity value of approximately 3.93 billion dirhams for ADNH. Following completion, ADQ would own approximately 54.98% of the entire issued share capital of ADNH.
Founder of #Dubai property firm DAMAC makes $255 mln take private bid | Reuters
Founder of Dubai property firm DAMAC makes $255 mln take private bid | Reuters
Emirati property tycoon Hussain Sajwani has made a 935.4 million dirham ($255 million) offer to buy out minority shareholders in DAMAC Properties (DAMAC.DU), which he has run for nearly two decades.
The all cash offer for DAMAC comes amid a years-long slump in Dubai's once hot property market, which has been exacerbated by the pandemic that hit the local economy hard last year.
DAMAC is best-known for building the Middle East's only Trump-brand golf course, which opened in Dubai in 2017 while Donald Trump was U.S. President.
Sajwani, who resigned as chairman and from the board, has made the offer through investment vehicle Maple Invest Co, which said he directly and indirectly controls 88.106% of DAMAC.
Maple Invest Co intends to increase the holding to at least 90% plus 1 so that it could exercise its right to buy out the remaining minority shareholders, it said in a statement.
DAMAC, listed in Dubai since 2015, would then be delisted.
Maple said it was offering to buy out minority shareholders for 1.3 dirham per share, the same as Tuesday's closing price and giving a total value of the offer of 935.4 million dirhams .
The deal values DAMAC at $2.1 billion, at par with its market value on Tuesday.
DAMAC shares were down 1.54% at 1.28 dirhams in late morning trade, below the buyout offer price.
Reuters reported last year that Sajwani was weighing buying out minority shareholders and taking the company private, sending shares up 11%.
DAMAC shares are down 1.44% year-to-date, while shares of Emaar Properties, Dubai's largest listed developer, are up nearly 14%.
Since Sajwani set up DAMAC in 2002, it has built 33,000 homes and has another 33,000 under construction, its website says.
DAMAC's core business is property development in Dubai but it has also launched projects elsewhere in the Middle East and is building the Nine Elms tower in London.
But Dubai's property sector has weakened for most of the past decade, hurt by oversupply in a market that is largely dependent on foreign investors.
DAMAC posted consecutive annual losses in 2019 and 2020 with Sajwani warning last year of difficult years ahead.
DAMAC's remaining board directors will meet on June 13 to appoint an independent committee to review the offer, according to a regulatory filing.
Emirati property tycoon Hussain Sajwani has made a 935.4 million dirham ($255 million) offer to buy out minority shareholders in DAMAC Properties (DAMAC.DU), which he has run for nearly two decades.
The all cash offer for DAMAC comes amid a years-long slump in Dubai's once hot property market, which has been exacerbated by the pandemic that hit the local economy hard last year.
DAMAC is best-known for building the Middle East's only Trump-brand golf course, which opened in Dubai in 2017 while Donald Trump was U.S. President.
Sajwani, who resigned as chairman and from the board, has made the offer through investment vehicle Maple Invest Co, which said he directly and indirectly controls 88.106% of DAMAC.
Maple Invest Co intends to increase the holding to at least 90% plus 1 so that it could exercise its right to buy out the remaining minority shareholders, it said in a statement.
DAMAC, listed in Dubai since 2015, would then be delisted.
Maple said it was offering to buy out minority shareholders for 1.3 dirham per share, the same as Tuesday's closing price and giving a total value of the offer of 935.4 million dirhams .
The deal values DAMAC at $2.1 billion, at par with its market value on Tuesday.
DAMAC shares were down 1.54% at 1.28 dirhams in late morning trade, below the buyout offer price.
Reuters reported last year that Sajwani was weighing buying out minority shareholders and taking the company private, sending shares up 11%.
DAMAC shares are down 1.44% year-to-date, while shares of Emaar Properties, Dubai's largest listed developer, are up nearly 14%.
Since Sajwani set up DAMAC in 2002, it has built 33,000 homes and has another 33,000 under construction, its website says.
DAMAC's core business is property development in Dubai but it has also launched projects elsewhere in the Middle East and is building the Nine Elms tower in London.
But Dubai's property sector has weakened for most of the past decade, hurt by oversupply in a market that is largely dependent on foreign investors.
DAMAC posted consecutive annual losses in 2019 and 2020 with Sajwani warning last year of difficult years ahead.
DAMAC's remaining board directors will meet on June 13 to appoint an independent committee to review the offer, according to a regulatory filing.
MIDEAST STOCKS Gulf markets up as oil prices rise; deals boost #UAE, Bahrain | Reuters
MIDEAST STOCKS Gulf markets up as oil prices rise; deals boost UAE, Bahrain | Reuters
Gulf stock markets rose in early trade on Wednesday tracking oil prices, with merger and acquisition deals providing an additional boost to the markets in the United Arab Emirates and Bahrain.
Oil prices rose for a second session on Wednesday on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted. read more
Saudi Arabia's benchmark index (.TASI) was up 0.4% as Al Rajhi Bank (1120.SE) gained 0.4% and edible oil maker and retailer, Savola Group (2050.SE) jumped 4.2%.
The Abu Dhabi index (.ADI) rose 0.5% with Abu Dhabi National Hotels Company (ADNH) (ADNH.AD) jumping 14.9% and Abu Dhabi Commercial Bank (ADCB) (ADCB.AD) adding 2.1%.
Abu Dhabi state-owned ADQ said on Wednesday it submitted an offer to ADNH to combine Abu Dhabi National Exhibitions Company (ADNEC) with the hotel firm. read more
The lender ADCB rose for a second day after it received on Tuesday, an amended offer for its stake in Alexandria Medical Services (AMES.CA), whereby the potential buyer increased the offer price to 700 million Egyptian pounds ($44.87 million) from 650 million offered earlier.
The Dubai index (.DFMGI) gained 0.2%. Dubai Islamic Bank (DISB.DU) rose 0.8% and Damac properties (DAMAC.DU) advanced 1.5% after Maple Invest Offered to acquire remaining stake in the real estate developer at 1.3 dirhams per share, with intention to take it private. read more
The index in Bahrain (.BAX) was nearly 0.6%.Al Ahli United Bank (AUBB.BH) increased 1.3%, while Khaleeji Commercial Bank (KHCB.BH) surged 8.9% following a takeover offer from GFH Financial Group (GFHB.BH) after raising stake in the lender to 69.05%.
GFH traded 0.5% higher.
Qatar's index (.QSI) edged up 0.1% as Industries Qatar (IQCD.QA) gained 0.6% and Qatar Fuel (QFLS.QA) dropped 1.5%
Gulf stock markets rose in early trade on Wednesday tracking oil prices, with merger and acquisition deals providing an additional boost to the markets in the United Arab Emirates and Bahrain.
Oil prices rose for a second session on Wednesday on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted. read more
Saudi Arabia's benchmark index (.TASI) was up 0.4% as Al Rajhi Bank (1120.SE) gained 0.4% and edible oil maker and retailer, Savola Group (2050.SE) jumped 4.2%.
The Abu Dhabi index (.ADI) rose 0.5% with Abu Dhabi National Hotels Company (ADNH) (ADNH.AD) jumping 14.9% and Abu Dhabi Commercial Bank (ADCB) (ADCB.AD) adding 2.1%.
Abu Dhabi state-owned ADQ said on Wednesday it submitted an offer to ADNH to combine Abu Dhabi National Exhibitions Company (ADNEC) with the hotel firm. read more
The lender ADCB rose for a second day after it received on Tuesday, an amended offer for its stake in Alexandria Medical Services (AMES.CA), whereby the potential buyer increased the offer price to 700 million Egyptian pounds ($44.87 million) from 650 million offered earlier.
The Dubai index (.DFMGI) gained 0.2%. Dubai Islamic Bank (DISB.DU) rose 0.8% and Damac properties (DAMAC.DU) advanced 1.5% after Maple Invest Offered to acquire remaining stake in the real estate developer at 1.3 dirhams per share, with intention to take it private. read more
The index in Bahrain (.BAX) was nearly 0.6%.Al Ahli United Bank (AUBB.BH) increased 1.3%, while Khaleeji Commercial Bank (KHCB.BH) surged 8.9% following a takeover offer from GFH Financial Group (GFHB.BH) after raising stake in the lender to 69.05%.
GFH traded 0.5% higher.
Qatar's index (.QSI) edged up 0.1% as Industries Qatar (IQCD.QA) gained 0.6% and Qatar Fuel (QFLS.QA) dropped 1.5%