Abu Dhabi – Mubasher: Abu Dhabi National Energy Company (TAQA) has received an offer from Abu Dhabi Power Corporation (ADPower) to acquire the majority assets of ADPower’s water and electricity generation, transmission, and distribution companies, according to a press release on Monday.
The transferred assets have collectively reported AED 4.8 billion worth of net income and total assets of nearly AED 120 billion by the end of 2018. In addition, these assets would generate approximately 4.9 GW for electricity and 58 million imperial gallons of water per day.
They also operate approximately 80,000 km of electricity transmission and distribution network and 20,000 km of water pipelines, which serve over a million customers.
Hence, the offer would create a new regional leading water and electricity company, which would be one of the largest utility companies in the GCC, a top 10 integrated utilities player in the Europe, the Middle East, and Africa (EMEA) region by regulated assets, and the third largest company listed on the Abu Dhabi Securities Exchange (ADX).
Upon closing the transaction and terminating the land leasing agreement between ADPower and TAQA, TAQA would issue a convertible instrument into 106.36 billion ordinary shares to ADPower, which owns most of the water and electricity assets across Abu Dhabi.
Upon the conversion of the instrument, ADPower would own 98.60% of the entire issued share capital of TAQA whose equity value is estimated at AED 4.156 billion in the offer.
Therefore, the new combined entity would have secure cash flows since its total assets are valued at around AED 200 billion, and more than 85% of its revenues would come from regulated and long-term contracted businesses.
Commenting on ADPower’s offer, the chairman of ADPower, Saif Mohamed Al Hajeri, said: “This will bring an integrated utilities company to the UAE public market for the first time and will provide investors with an opportunity to invest in high-quality and secure assets for long-term growth.”
Meanwhile, the CEO and managing director of ADPower, Jasim Husain Thabet, remarked: “The new entity will be robust and primed for further growth in the UAE and internationally. With that in mind, and on the basis that the transaction completes, it is our intention to increase the free float of the company through a follow-on public offering.”
Thabet added: “We are also in the process of finalising three landmark projects in the UAE. This includes a new 2.4 GW Combined Cycle power plant in Fujairah and a 2 GW Solar Photovoltaic power project in Abu Dhabi, along with a 200 million imperial gallons per day project in Taweelah, Abu Dhabi that will be the world’s largest reverse osmosis desalination plant.”
