Green Power Firm Masdar to Stay Private Despite Abu Dhabi IPO Rush - Bloomberg
The chief executive officer of Abu Dhabi’s largest renewables company said he prefers to stay private for now because the company is well funded — despite the regional boom in initial public offerings.
“If you have capital and it’s sufficient, why do you want to go public?” Masdar CEO Mohamed Jameel Al Ramahi said in an interview. “It adds more complexity on management.”
The company is planning $50 billion of new investments to reach its target of 100 gigawatts of clean power projects in which it holds stakes. The company plans to use about $15 billion of its own cash for the outlay, and is positioned to achieve the requirement, taking away the need for raising funds from a share sale, the CEO said.
Abu Dhabi, like several other Middle Eastern capitals, has encouraged state-backed and private companies to list locally in an effort to deepen equity markets. It’s resulted in a flurry of IPOs that helped drive stocks in the United Arab Emirates to over the $1 trillion mark last year.
Abu Dhabi’s flag carrier Etihad Airways is among companies that are weighing an IPO. Etihad’s CEO Antonoaldo Neves has said the company is ready to list whenever shareholder ADQ decides, though it has no immediate funding needs.
“We are blessed with three strong shareholders, and we are blessed to have partners and financial institutions and investors through our bonds to back our growth story,” Al Ramahi said. “In essence, to achieve my 100 gigawatt target, I don’t need to go public.”
Masdar builds its portfolio through acquisitions financed through its state-run shareholders, Abu Dhabi National Energy Co., known as Taqa; Mubadala Investment Co. and Abu Dhabi National Oil Co. It also builds new projects, which are mostly funded through a mix of project debt and green bonds.
Having acquired large renewable energy companies in Spain and Greece last year, Masdar intends to build its European portfolio through these platforms, Al Ramahi said.
Masdar aims to grow its US portfolio to 25GW over the next few years. “Of the 25-gigawatts, the majority will come through Terra-Gen,” Al Ramahi said, referring to a US developer the company acquired last year. “But that doesn’t stop us from doing more on our own.”
While Masdar isn’t currently planning to list its shares, it could be ready at a moment’s notice, the CEO said. “If the shareholders want it, we can go public tomorrow,” said Al Ramahi, pointing to the company’s previous bond issuances and credit ratings.
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