The Irishman fronting the UAE’s biggest IPO in a decade

Irishman John Carey is fronting the biggest initial public offering (IPO) in the United Arab Emirates in over a decade in a deal worth 3.31 billion dirhams (€767 million).

Carey, who worked for 17 years at oil giant BP in senior roles around the globe, joined Abu Dhabi National Oil Company's (Adnoc) in September to spearhead the IPO of its retail unit and to help transform the state-controlled company's business model.

“I came into the company as much to lead a transformation as I came in for the listing,” says Carey, deputy chief executive of Adnoc Distribution, in an interview from Abu Dhabi. “I don’t think they were going to kick me out the door if the listing hadn’t happened. The reason for the IPO in the first place was that Adnoc decided they needed to be much more active with the management of their portfolio and therefore they saw the need for transformation across the organisation - not just in Adnoc Distribution but the whole of Adnoc.”

The company, which pumps most of the crude in the UAE, is the fourth-biggest producer within the Opec cartel with output of about 3 million barrels of oil a day. The retail unit, Adnoc Distribution, started trading Wednesday on the Abu Dhabi stock exchange.

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The listing comes as neighbouring Saudi Arabia and Oman seek to privatise energy assets on public markets as lower oil prices squeeze revenues. Analysts say Adnoc has won bragging rights over Saudi Arabia by beating its national company Aramco to the market with a listing. Saudi Arabia plans to list 5% of Aramco next year, which officials predict could raise $100 billion, making it the world's biggest IPO.

Kilkenny-born Carey, (55), who graduated from UCD in 1983 with a degree in Chemical Engineering, says he spent most of his first three months at the company on roadshows with investors in London, New York, Boston.

Based on the offer price, the company’s market cap is about $8.5 billion. International investors represented 30 per cent of the sale, with 10 per cent from retail and the remainder being regional institutions. The retail portion was 22-times oversubscribed, according to Carey.

“What is clear is this is a region that people increasingly understand but the more we can be transparent the better,” says Carey, who lives in Abu Dhabi with his wife. “We are absolutely committed to getting out there and it’s part of my DNA anyway of doing face-to-face meetings rather than conference calls until we get to know people.”

Carey says Adnoc is now having "lots of very open conversations" about setting up more joint ventures with partners and working with international partners to drive value. The company also plans to expand next year into Dubai and Saudi Arabia.

Carey's boss, chief executive Sultan Ahmed Al Jaber, is a close ally of the powerful Abu Dhabi crown prince Mohammed bin Zayed.

The deal is the first privatisation anywhere in the Middle East for years and the biggest IPO on the Abu Dhabi Exchange since the insurer National Takaful Company sold shares in 2012 and the biggest listing on the stock market for the past 10 years,

Adnoc had initially hoped to raise as much as $2 billion in a sale of 20 per cent of the unit, which includes 360 fuel stations and 235 Oasis branded convenience stores across the UAE.

However, management decided to only sell 10 per cent of the company after western investors expressed concern over unrest in the region, such as the blockade of neighbouring Qatar, the arrest of senior members of the royal family in Saudi Arabia and Yemen firing rockets at Saudi.

“Given some of the things going on in the region, management are over the moon with where things have landed,” says a source close to the transaction. “Plus, while they have fixed, stable margins on fuel in the UAE, which is highly cash generative, the rest of the equity story was around the promise of transformation and growth in the future.”

The IPO was coordinated globally by Citigroup, HSBC, Merrill Lynch and First Abu Dhabi Bank. Goldman Sachs, EFG-Hermes and Morgan Stanley were bookrunners for the offering while Rothschild was the sole financial adviser to Adnoc.