GIP consortium seeks financing for Adnoc deal

Potential buy: An Emirati man is seen near the logo of Adnoc in Ruwais, United Arab Emirates. Despite the coronavirus crisis, infrastructure investors have been defying the downturn to deploy capital. — Reuters

NEW YORK: An investor group backed by Global Infrastructure Partners (GIP) and Brookfield Asset Management Inc is seeking a loan of about US$8bil to finance the potential purchase of a stake in Abu Dhabi National Oil Co’s (Adnoc) natural gas pipelines, according to sources.

The consortium – which also includes Italian infrastructure operator Snam SpA, Ontario Teachers Pension Plan, Singapore sovereign fund GIC Pte and South Korea’s NH Investment & Securities Co – has reached out to banks to gauge their interest in participating, according to the sources.

No final agreements have been reached, and details of the financing could change, the sources said. Representatives for the consortium members declined to comment.

The group is the only remaining bidder for a 49% stake in Adnoc’s US$15bil pipeline business after other parties including Australian fund manager IFM Investors Pty dropped out, sources said earlier this month.

The financing deal could be one of the largest for an infrastructure asset this year. Despite the coronavirus crisis – which has crippled dealmaking globally – infrastructure investors have been defying the downturn to deploy capital.

KKR & Co’s infrastructure arm last month said it would buy the waste-management arm of UK utility owner Pennon Group Plc for US$5bil, one of the biggest deals since the pandemic hit.

The United Arab Emirates, of which Abu Dhabi is the capital, is among Persian Gulf oil producers using their energy assets to draw fresh capital to the region.

In Saudi Arabia, Aramco, the world’s largest oil producer, is weighing the sale of a stake in its pipeline unit to raise money amid a slump in crude prices, according to sources.

KKR and BlackRock agreed last year to invest US$4bil in Adnoc’s oil pipeline network, securing two decades of guaranteed returns.

GIC bought a stake in the business later. Adnoc has also listed its fuel retail unit and sold a stake in its US$11bil drilling business to Baker Hughes Co. — Bloomberg

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