Abu Dhabi National Energy (Taqa) will for the first time list shares in one of its foreign subsidiares, with an IPO of its Moroccan operations.
The announcement came on the same day that the company confirmed its plans to boost its presence in northern Iraq by investing in new and existing power plant projects.
Taqa is set to raise 1.5 billion Moroccan dirhams (Dh667 million) by selling off 3.4 million new shares in Jorf Lasfar Energy Company (JLEC), its wholly owned Moroccan subsidiary.
JLEC yesterday announced that it had received approval from the Conseil Déontologique des Valeurs Mobilières Morocco’s financial markets authority, to increase its capital by 3.4 million shares, priced at 447.5 Moroccan dirhams each.
The company will offer 2.23 million new shares via an IPO on the local bourse between December 10 and 12.
The 1.12 million remaining shares have been secured by the Moroccan institutional investors RMA Watanya, Société Centrale de Réassurance and Mutuelle Centrale Marocaine d’Assurances.
Taqa will retain an 85.79 per cent stake in the company, which has been valued at about 9 billion Moroccan dirhams.
The IPO will be Morocco’s first since January 2012, and the largest share offering since the IPO of Alliances Development Immobilier in July 2008.
“JLEC is the leading energy operator in Morocco and we feel that this new step will allow us to anchor our business in the Moroccan economy by opening up our capital to institutional investors,” said Abdelmajid Iraqui Houssaini, JLEC’s chief executive.
Jorf Lasfar is Morocco’s first independent power producer and supplies about 38 per cent of the country’s electricity needs.
Electricity consumption in Morocco is expected to double by 2020 and quadruple by 2030, according to Frank Perez, Taqa’s head of global power and water.
“It’s a good market to be in,” he said. “The IPO will also recognise the full value of the asset and allow us to redeploy proceeds to future Taqa projects in Morocco.”
In the face of growing demand for electricity, the country is looking to diversify its energy mix, and plans to generate 42 per cent of its electricity from renewable sources by 2020.
Taqa is looking to be part of this diversification process, and is looking at developing the country's wind power capacity.
The Dh9bn Moroccan valuation for the company does not fully include Jorf Lasfar 5 & 6, two coal-fired units currently under construction.
The Jorf Lasfar 5 & 6 project will be 66 per cent owned by JLEC, with Taqa owning the remainder.
The new units, which are expected to be completed next year, will increase the plant’s capacity, currently standing at 1,356 megawatts, by 700MW.
Taqa agreed to a US$1.4bn financing plan for the extension in January of year.
The valuation of Taqa’s Moroccan operations, encompassing JLEC together with the new units, is estimated at about 11 billion Moroccan dirhams.
In a separate development, Taqa’s Iraq president Leo Koot yesterday announced that it would sign agreements to expand or build power plants in the north of the country by the middle of next year, according to Bloomberg.
The company is close on several deals he said, and aimed to build up power capacity of 1000 to 2000MW.
The company plans to commence production at the Atrush oilfield in northern Iraq as soon as the end of next year.
Taqa won approval in October to pump its first oil in the Kurdish region of Iraq, where it is investing $300m to develop the Atrush block.
Last month the company announced that it had reached an agreement to sell its 40 per cent stake in Noordgastransport, a natural gas pipeline in the Netherlands, for about $240m, to the Danish pension fund PensionDanmark.
The transaction, which is still subject to regulatory approvals, is expected to close by the end of the year.
Taqa’s shares ended trade in Abu Dhabi yesterday at Dh1.3 apiece, up by 3 fils.
jeverington@thenational.ae