Through a new deal it entered into with a consortium led by "Apollo" worth 20 billion dirhams

ADNOC is attracting 10 billion dirhams of foreign direct investment

• The new agreement comes within the framework of the successful ADNOC program to attract and implement joint investments.

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• Sultan Al-Jaber: "The new partnership provides ADNOC with cash from real estate assets that are not linked to its core business."

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The Abu Dhabi National Oil Company (ADNOC) announced yesterday that it has concluded a long-term partnership agreement with a consortium that includes a number of investment institutions led by "Apollo Global Management" (Apollo) listed on the New York Stock Exchange, which is one of the largest alternative investment management companies in the world. This is to invest in ADNOC real estate assets worth 20 billion dirhams ($ 5.5 billion).

ADNOC will get immediate returns of 10 billion dirhams (2.7 billion dollars) under this deal, which is expected to be completed during the fourth quarter of this year after obtaining regulatory approvals and fulfilling the required conditions.

Rental returns

ADNOC stated in a statement that this partnership allows it to benefit from the rental returns of a group of its real estate assets, under a lease agreement for a maximum period of 24 years.

It added that it would also benefit from the great value of a group of its non-core real estate assets to attract new global capital to re-invest it in supporting strategic growth projects and initiatives in its core businesses in the oil and gas sector.

ADNOC has identified a group of its real estate assets and placed them under the umbrella of its subsidiary Abu Dhabi Real Estate Leasing Holding Company Ltd. RSC (ADPLHC), which owns long-term rental 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. It was also 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, while it would keep ADNOC holds a majority stake of 51%, as well as full ownership of its real estate assets and the right to control and manage operations, operation and maintenance.

Distinguished partnerships

The Minister of Industry and Advanced Technology and CEO of ADNOC and its Group of Companies, Dr. Sultan Ahmed Al Jaber, said: “In line with the directives of the wise leadership, (ADNOC) is keen to conclude distinguished partnerships that achieve the maximum possible value from its asset portfolio by attracting smart and innovative strategic investments.”

He added: “Today we are pleased to sign 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 and to apply the best international standards in real estate management and raise cost efficiency in our real estate assets portfolio.” .

Cash

"This partnership provides ADNOC with cash from real estate assets that are not linked to its core business, to reinvest it in supporting and financing strategic growth projects and initiatives in its main oil and gas business," Al-Jaber said.

He added, “The innovative and flexible structure of this partnership allows ADNOC to attract global capital while at the same time retaining the right to 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 global investment institutions. A pioneer for the UAE and Abu Dhabi and consolidating the position of the UAE as a preferred destination for investment in various circumstances, thanks to the reliable and stable environment and its distinguished legislative system.

Promising opportunities

For his part, Leon Black, President, CEO and founder of Apollo, said: “We are pleased to invest in the (ADNOC) real estate portfolio and contribute to support its strategic plans, while providing promising and low-risk opportunities for our investors.”

"Executing and structuring a long-term institutional investment in this distinct manner reflects Apollo's ability to adopt innovative strategies to design investment deals that are commensurate with the goals of our partners," he added.

"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," Black emphasized.

Attracting investments

The agreement, signed yesterday, 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.

HSBC acted as the financial advisor to ADNOC, while Mullis and Company acted as an independent financial advisor to ADNOC.

A proactive approach

It is noteworthy that 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 bonds worth $ 3 billion backed by the assets of the “pipeline”. Abu Dhabi Crude Oil Company, and it successfully executed a public offering on a part of ADNOC Distribution in the first listing of a subsidiary of ADNOC.

It has also entered into many strategic commercial partnerships through its companies in the fields of drilling, refining, fertilizers, commodity trading, products, derivatives and others.

Unique opportunity

Apollo's new partnership with ADNOC provides 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 most important credit rating companies in the world, which is expected to Strong occupancy and rental rates.

"Apollo" designed and structured the deal based on its ability to operate in various global markets and the great experience it gained through its integrated investment platform, which includes investments in real estate, infrastructure and insurance sectors.

The deal is expected to be completed during the last quarter of 2020 after obtaining the approvals and fulfilling the conditions.

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