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GIP consortium to seek $8 billion loan for ADNOC deal

The UAE is eager to work with the new US administration, from unconventional developments to AI and renewable energies.
Sultan Ahmed al-Jaber, the Emirati minister of state and the CEO of Abu Dhabi's state-run Abu Dhabi National Oil Co., ADNOC, speaks at the opening ceremony of the Abu Dhabi International Petroleum Exhibition & Conference, ADIPEC, Abu Dhabi, United Arab Emirates - 11 Nov 2019 Photo by Kamran Jebreili/AP/Shutterstock (10471756a)

An investor group backed by Global Infrastructure Partners and Brookfield Asset Management is seeking a loan of about $8 billion to finance the potential purchase of a stake in ADNOC’s natural gas pipelines, according to people with knowledge of the matter.

The consortium – which also includes Italian infrastructure operator Snam, Ontario Teachers’ Pension Plan and Singapore sovereign fund GIC – has reached out to banks to gauge their interest in participating, according to the people, who asked not to be identified because the information is private.

No final agreements have been reached, and details of the financing could change, the people said. Representatives for Ontario Teachers, Snam, Brookfield and GIC declined to comment. A representative for GIP didn’t immediately respond to requests for comment.

The group is the only remaining bidder for a 49% stake in ADNOC’s $15 billion pipeline business after other parties including Australian fund manager IFM Investors dropped out, people with knowledge of the matter 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 will buy the waste-management arm of UK utility owner Pennon Group for $5 billion, 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 people familiar with the matter.

KKR and BlackRock agreed last year to invest $4 billion 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 $11 billion drilling business to Baker Hughes.

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