Abu Dhabi’s ADNOC IPOs – Klaus Froehlich, ADNOC Group CIO and Jan-Martin Nufer, Borouge CFO (IPO Stories, ep. 39)

ADNOC, the Abu Dhabi National Oil Company, has been one of the most active IPO sponsors globally, with 6 IPOs of its subsidiaries and JVs, starting with ADNOC Distribution in 2017, followed by ADNOC Drilling and Fertiglobe in 2021, Borouge in 2022, and ADNOC Gas and Logistics in 2023.

In today’s episode we are joined by Klaus Froehlich, the Chief Investment Officer of ADNOC Group, whose team has overseen these listings, all done on the Abu Dhabi stock exchange, ADX. We are also joined by Jan Martin Nufer, the CFO of Borouge, to share the story of this petrochemical company, and the announced merger of the company with Borealis to form a global petrochemicals leader, Borouge Group International.

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Disclaimer: The discussion in this episode is not financial advice, nor an investment recommendation, nor a solicitation to buy or sell any financial instruments or an offer for financial services or any other transaction. The information contained in the recording has no contractual value and is intended for informational purposes only. Amundsen Investment Management and the participants in this podcast may have holdings in the companies being discussed. Any views expressed are those of the guests only, and not of Amundsen Investment Management.

[0:28] Per Einar Ellefsen: ADNOC, the Abu Dhabi National Oil Company, has been one of the most active IPO sponsors globally, with six IPOs of its subsidiaries and JVs—starting with ADNOC Distribution in 2017; followed by ADNOC Drilling and Fertiglobe in 2021; Borouge in 2022; and ADNOC Gas and ADNOC Logistics & Services in 2023. In today’s episode we’re joined by Klaus Froehlich, the Chief Investment Officer of ADNOC Group, whose team has overseen these listings, all done on the Abu Dhabi Securities Exchange (ADX). 

[1:10] Per Einar Ellefsen: We’re also joined by Jan-Martin Nufer, the CFO of Borouge, to share the story of this petrochemical company and the announced merger with Borealis and NOVA to form a global petchem leader, Borealis Group International (BGI). 

[1:22] Per Einar Ellefsen: Klaus and Jan-Martin, very happy to have you here today to talk about ADNOC’s IPO history and the Borouge–Borealis transaction that’s coming after that. Klaus, maybe you can start by introducing yourself. 

[2:01] Klaus Froehlich: Sure. Thank you, Per, for having us today. I’m the Group Chief Investment Officer of ADNOC and have been with the group a little over five years. I’ve been very much involved in all the transactions we’ve been doing—particularly the IPOs over the last five years. Happy to be here today. Jan-Martin? 

[2:22] Jan-Martin Nufer: Hello, Per. Good to be with you today. I’m Jan-Martin Nufer, the CFO of Borouge. I joined in October 2022. Before that I spent 16 years with Borealis on the petchem side, and in this capacity I had the pleasure to work with Klaus and the team—amongst others—on the IPO of Borouge. 

[2:41] Per Einar Ellefsen: Let’s start with the bird’s-eye view of ADNOC Group. You’ve been one of the most active IPO issuers in the world over the last five–six years: six IPOs and several very large follow-on transactions in the UAE. Can we start with the overall vision you’ve had for taking some subsidiaries public and then using capital markets to finance the growth of those companies? 

[3:04] Klaus Froehlich: Absolutely. Maybe I’ll highlight the strategic choice behind our IPO journey. It was not really about listing companies, and least of all about raising funds. It was about catalyzing growth, diversifying the local markets, and embedding a culture of accountability, transparency, and delivery across our portfolio companies. Previously, many of these companies were a division within a division; as public companies they’re exposed to research analysts, investors, and quarterly performance. That created a totally different mindset and a lot of value. With that in mind, we looked at our portfolio and felt we had some “hidden pearls” that we could surface via IPOs—letting others participate in the growth while making the companies better. 

[4:00] Per Einar Ellefsen: In terms of listing, you chose to list in the UAE—obviously, being ADNOC. Historically you could have decided to list overseas as well, given the size of these companies and their attractiveness to international investors. What makes the UAE today a good place to list these businesses? 

[4:19] Klaus Froehlich: If you’d asked me 10 years ago, I might have said do a local listing and add a GDR. But the local markets have evolved a lot. Being ADNOC, we felt we had a responsibility to develop the UAE—and particularly the Abu Dhabi capital markets. The markets have undergone a remarkable transformation: they’re more liquid, diverse, and accessible. ADX has taken major steps to make the market more attractive for foreign investors and issuers. Our deals—high-quality companies and large-scale transactions—helped refocus international investor interest. There was hype 20 years ago, then deflation after the GFC, and it took time to recover. We saw it as our mission to develop the local market by floating companies and paying particular attention to aftermarket performance, investor base diversification, and research access. We didn’t need to go anywhere else—today it’s easy for international investors to access ADX. 

[5:12] Klaus Froehlich: I think our IPOs gave others courage. Going public is a big deal. It needed us to kick-start this, show it’s possible to raise capital and attract international and local capital. Importantly, we’ve seen private-sector listings follow— that’s the best development because it’s what a normal, functioning capital market looks like. 

[5:43] Per Einar Ellefsen: When you look at the subsidiaries you chose to take public—ADNOC Distribution, ADNOC Drilling, Fertiglobe, Borouge, ADNOC Gas, ADNOC Logistics & Services—how did you decide which ones were fit for public markets? 

[7:26] Klaus Froehlich: First, the companies have to be ready and of sufficient size. For ADNOC Logistics & Services, we merged five companies over the years to create an integrated shipping and logistics business with the right scale, then did an acquisition to round it out. That took a couple of years to become IPO-ready. In other cases the businesses were already contained and ready to go. Another example is ADNOC Gas: it was created by merging four ADNOC-owned companies (some partially owned, some fully). So readiness, growth profile, and size matter. But most important for us is aftermarket delivery: the IPO sprint ends on listing day; the marathon starts afterward. We keep a hawk’s eye on that—transparency, keeping investors abreast, and using full 144A processes and international best practice so this becomes the standard on ADX. 

[9:14] Per Einar Ellefsen: I like your focus on delivering for investors over time and on world-class execution pre- and post-IPO. You mentioned IPO readiness. What’s more important: internal readiness—governance and maturity—or external conditions like market windows? 

[9:42] Klaus Froehlich: Be ready first, then wait for the window. We usually do an IPO readiness check—often with a Big Four firm—covering everything a public company should have: systems, management, IR, risk management, etc. Then it’s about the equity story. Some companies had a good story because they were ADNOC subsidiaries we’d built into “world champions”; others were champions in their own right, like Borouge. Internal readiness—the “plumbing”—and a credible business plan are paramount; then you pick the market window. More important than the market window is whether it’s the right time from a company-performance standpoint. Don’t go too early. 

[11:40] Per Einar Ellefsen: In your view, what is a successful IPO? 

[11:42] Klaus Froehlich: A ready company, the right timing, reasonable pricing that makes sense for both buyer and seller—and then positive aftermarket performance. Most importantly, the company delivers what it told analysts and investors in the IPO research. After a year or two, it’s just a listed company; then it’s about stewardship and delivery. 

[12:53] Per Einar Ellefsen: In each case you initially had relatively low free floats. For example, ADNOC Gas started at 5%, still a very large transaction but low versus market cap. 

[13:04] Klaus Froehlich: Free float is about absolute size—enough to create liquidity so investors can buy and sell. Some companies aren’t large enough to float more initially. Also, many of our stocks appreciated post-listing, and we followed with secondaries in ADNOC Distribution, ADNOC Drilling, and ADNOC Gas. That dramatically improved liquidity, enabled MSCI inclusion, and boosted trading. Research coverage is strong too—ADNOC Drilling is covered by ~20 analysts. We even have Chinese brokers covering our stocks. ADX can deliver that; these are “proper” exchanges attracting global capital. 

[15:11] Per Einar Ellefsen: On investor engagement, what types of investors add the most value to your listed companies? 

[15:32] Klaus Froehlich: All of them, in different roles. Retail makes ADNOC investable for the public. Family offices and regional trading houses provide liquidity. GCC-based institutions have grown with the region’s IPO activity. Internationally, you have EM generalists, sector specialists, and hedge funds. Typically, initial ownership skews domestic/regional; after we increase free float, international participation and liquidity expand significantly. 

[17:05] Per Einar Ellefsen: Apart from large liquidity events, did you have other strategies to attract international interest? 

[17:12] Klaus Froehlich: Intensive investor engagement—roadshows, conferences, ongoing dialogue. One of our companies is marketing in China right now. We approach it systematically, not opportunistically. 

[17:40] Per Einar Ellefsen: You mentioned MSCI inclusion, which just happened in ADNOC Gas. How important is index inclusion? 

[17:50] Klaus Froehlich: Very important—it puts you on the global map and the impact can be exponential. You get onto the screens of benchmarked investors; research follows; liquidity follows—a virtuous circle. Without it, you risk being stuck in an illiquidity trap. We increased free floats to enable MSCI, attracted significant capital to the UAE, and created long-term value. 

[19:10] Per Einar Ellefsen: I have the same analysis—getting into indices post-IPO is crucial. Let’s switch to the transaction you announced post-IPO: BGI. Can you start by explaining what Borouge, BGI, and NOVA actually do? 

[19:37] Klaus Froehlich: Quick primer: when you extract oil or gas, you also get ethane (C2). You “crack” ethane at very high temperature to make ethylene, then polymerize it—this is where Borealis’s Borstar® technology comes in—to produce polyolefins like polyethylene and polypropylene. Different formulations have different properties—soft/hard, heat/UV resistance, low-temperature toughness, etc. Borealis has perfected many specialty segments—e.g., polymers for Arctic-grade pipes, or casings for super high-voltage cables used in renewables. That innovation translates into differentiated applications and margins. 

[21:08] Per Einar Ellefsen: Can you explain the background and rationale for the BGI transaction? 

[21:13] Klaus Froehlich: We’d been looking at polyolefins for quite some time. Borouge is a 25-year JV between us and Borealis; there’s a deep, long-term partnership. Borealis is in Europe; Borouge serves Asian markets; NOVA is in North America. Putting the three together is complementary and synergistic—creating a global footprint and letting us apply Borealis’s innovation across the platform. When we did the Borouge IPO, this wasn’t yet concrete; it evolved over the last years. But it’s a logical combination across distinct geographies. 

[22:46] Per Einar Ellefsen: It clearly creates a global leader, but in a sector some investors are shunning at the moment. 

[22:57] Klaus Froehlich: Plastics are an extremely important material. They often replace metals and are less energy-intensive than aluminum or steel. We’re doing this for the long term. The sector follows the economy; no one forecasts perpetual zero GDP growth. As the world recovers, chemicals follow—and the strong players benefit most. 

[23:48] Per Einar Ellefsen: You mentioned the European cost curve for Borealis. How does Borealis have an advantage while others shut down? 

[23:56] Klaus Froehlich: Larger, long-term feedstock contracts; coastal plants with flexible crackers able to run multiple feedstocks; storage to arbitrage; and the ability to import U.S. ethane. That optionality is an advantage. 

[24:23] Jan-Martin Nufer: Looking back over cycles, Borealis is the strongest, most resilient player in Europe. Sites are integrated—co-located with OMV. Two Nordic crackers have flexible feedstock options. We have U.S. ethane import facilities. Add a unique innovation capability—central to Borealis’s success and to Borouge’s success—plus the UAE ethane advantage and economies of scale. With the expansion coming on stream, we’re operating the largest integrated petchem site globally. All together, it’s the most resilient setup, especially visible in tough markets. 

[26:11] Per Einar Ellefsen: You mentioned OMV—you’re partnering with OMV on the JV. What do OMV and ADNOC each bring? 

[26:19] Klaus Froehlich: We’ve partnered with OMV in Abu Dhabi for decades, and more recently across upstream and other areas. With mega-mergers, the risk is not knowing what you’re getting into; in this case we’ve had cross-holdings and deep collaboration for years. Under OMV’s stewardship, Borealis has driven significant innovation. Borouge is the product of Borealis’s Borstar® technology and ADNOC’s ethane—started 25 years ago and today a ~$20bn company. ADNOC brings a global approach and strong performance culture; Borealis brings innovation. We could have gone alone, but ADNOC’s culture is to partner—upstream, refining, fertilizers, oil and gas concessions—because 1+1>2. 

[28:32] Per Einar Ellefsen: On margins, you’ve communicated a through-the-cycle EBITDA target of $7 billion. How confident are you? 

[28:45] Klaus Froehlich: Very. There’s significant growth at BGI: NOVA’s AST2 (Advanced SCLAIRTECH™ 2) in Canada; Borealis with Borstar® and Kallo (Belgium); and Borouge with ongoing debottlenecking (P4/P5) and then Borouge 4. Much of this growth capex is behind us; volumes are coming on stream, which naturally adds EBITDA regardless of price. Borouge 4 is chunky, but OMV and ADNOC are de-risking it by funding and commissioning outside the perimeter and contributing it at cost once complete (EPC cost ~$6.2–6.3bn plus start-up costs, mid-$7bn overall) for an asset that can generate ~$900m EBITDA. Add conservative synergies (~$500m) and ongoing efficiency programs at NOVA, and you bridge from a baseline ~$4.5bn to $7bn, with potential upside from price recovery. 

[31:16] Per Einar Ellefsen: You also communicated on dividends. You set a DPS floor versus current Borouge. Why is that important given cyclicality and leverage? 

[31:38] Klaus Froehlich: Borouge pays taxes—so an efficient capital structure has value. We see ~2.0–2.5x net debt/EBITDA as right for a chemicals company. We’ll get there via growth and, if appropriate, a capital increase alongside the combination—both to right-size leverage and, importantly, to increase free float by ~$4bn, enabling MSCI inclusion. On dividends: even through cycles, these businesses generate strong cash. We want to share that. Setting a floor is unusual in chemicals, but BGI’s margins, cash generation, and cost-curve position support it. 

[34:15] Per Einar Ellefsen: With your experience from the $3bn ADNOC Gas placing, do you feel the UAE market—and international demand—is deep enough for a potential ~$4bn equity raise in BGI? 

[34:30] Klaus Froehlich: Yes. Don’t forget the ~$1bn ADNOC Drilling secondary as well. Demand was broad: local retail and institutions, GCC, and international generalists, sector specialists, and hedge funds. Timing and cycle matter, but given who the shareholders are, we’re not worried about capital structure. We expected recovery this year; tariffs delayed it by a few quarters. It should come, and that makes the upside more attractive. 

[35:57] Per Einar Ellefsen: On Covestro—you’re in the process of taking it private. How does Covestro fit with BGI in ADNOC’s chemical strategy? 

[36:07] Klaus Froehlich: Completely separate and distinct. BGI is polyolefins. We wanted a foot in intermediates and specialties. We screened value chains and landed on Covestro—strong in polyurethanes (foams for insulation in buildings, fridges—transition-led growth) and polycarbonates (engineering plastics replacing metals in autos and beyond). It’s squarely in energy-transition trends and circularity. More broadly, chemicals diversify ADNOC: whether feedstock comes from the ground or the bin, the world will need chemicals. Covestro is a global platform—~42 sites; roughly one-third of sales each in Europe, Asia, and the U.S.—and not something we plan to integrate with BGI. 

[38:37] Per Einar Ellefsen: Last question: after listing several companies, any specific learnings you’ve applied over time? 

[38:49] Klaus Froehlich: Readiness is everything. We had the luxury not to rush; float when ready, not out of necessity. Have the right team—management and IR onboard during IPO prep so they’re embedded in the story. Free float matters, but don’t sell more than you’re comfortable with—you can always come back with secondaries. And the tattoo every management team should have: don’t miss earnings expectations. Guide to the right place if needed; no surprises. 

[40:09] Per Einar Ellefsen: Great lessons about IPOs. Thank you very much, Klaus and Jan-Martin, for sharing the ADNOC story. 

[40:16] Klaus Froehlich: Thank you very much, Per. 

[40:18] Per Einar Ellefsen: Thank you for listening to IPO Stories. In future episodes we’ll host CEOs, CFOs, advisors and other participants in the IPO process to learn from their experience—like from Klaus and Jan-Martin today. If you like the show, please follow us on Spotify or Apple Podcasts and share it with people around you. If you have questions about the IPO process you’d like us to address with future guests, please get in touch at contact@ipostories.com and follow our LinkedIn account. Amundsen Investment Management.