A brand new utility firm is to be made in the UAE as Abu Dhabi National Energy Co. (Taqa) and Abu Dhabi Power Corp. (ADPower), a public joint stock company that possess most of the water and electricity assets throughout Abu Dhabi, are considering the merger of capital.
As per the asset swap deal, ADPower will have the control of Taqa if both the companies agreed to the deal. The amalgamation of the two firms will make one of the biggest utility company in the Mena region and one of the largest listed on the Abu Dhabi bourse.
With total capital of around Dh200 billion, the merged firm would benefit from highly anticipated and secure cash flows, with more than 85 per cent of its revenue coming from regulated and long-run contracted businesses.
ADPower has decided to move certain capital to Taqa in exchange for 106,367,950,000 shares in Taqa and the completion of the land lease agreement between the two UAE giants.
This shows an exchange ratio of 17.53423833 new ordinary shares in Taqa given for all present share.
“The planned transaction is an important part of Abu Dhabi’s overall strategy to make perfect performance throughout the water and electricity department and to further aid the development of the UAE capital markets. This will bring a unified utilities company to the UAE public market for the first time and will give investors with an opportunity to invest in high-quality and secure assets for long-run development.” Saif Mohamed Al Hajeri, chairman of ADPower.
The offer is answerable to approval of Abu Dhabi Department of Energy (DoE), the Securities and Commodities Authority (SCA) and Taqa shareholders.