OMV AG and Abu Dhabi National Oil Co (ADNOC) on Thursday announced changes to their investment plans for their pending polyolefins joint venture (JV), though they still expect to complete the transaction this month.
Last year ADNOC and OMV signed a deal under which Borouge PLC and Borealis GmbH will merge to form Borouge Group International AG (BGI). ADNOC concurrently agreed to acquire NOVA Chemicals Corp, a Calgary-based subsidiary of Emirati sovereign investor Mubadala Investment Co, to be transferred to the new JV.
“Considering the current market environment, OMV and ADNOC have agreed to strengthen the balance sheet of Borouge Group International AG as a precautionary measure”, said a statement on OMV’s website Thursday.
“This will entail a temporary adjustment of the dividend payments for the financial year 2026, including limiting the payment to the second dividend tranche in 2026 amounting to 50 percent of the previously estimated dividend.
“The expected impact on the OMV dividend would be around EUR 0.6-0.7 per OMV share for the year 2026, based on a contribution to OMV’s dividend distribution of $250 million by Borouge Group International, instead of the previously estimated $500 million”.
The expected annual BGI dividend is at least $2.2 billion, according to the JV agreement announced March 2025.
“Borouge PLC shareholders will also benefit from a minimum dividend commitment of 16.2 fils per share, which will be maintained by Borouge Group International AG post completion of the tender offer”, OMV added Thursday.
ADNOC and OMV have now also agreed to adjust the timing of the listing of BGI’s shares on the Abu Dhabi Securities Exchange (ADX), the offer to Borouge free-float shareholders to receive shares in BGI in exchange for their Borouge shares and a capital increase for BGI.
“The timing of such ADX listing and exchange offer is anticipated to align with the capital increase at the level of BGI, which is currently expected to take place in 2027, subject to market conditions”, OMV said in a separate statement Thursday.
“ADNOC and OMV have also agreed to discuss certain further shareholder support measures in the year 2027 if required to maintain BGI’s investment grade rating”, OMV added.
ADNOC and OMV also announced Thursday an “asset usage agreement” for a polyolefins production project in which ADNOC owns 70 percent and OMV 30 percent.
“B4 is a new integrated polyolefins production complex with 1.5 million tonnes ethane cracker and 1.4 million tonnes of polyethylene capacity, with the first plant expected to start up this quarter”, OMV said.
“The agreement enables Borouge PLC, and subsequently Borouge Group International AG, to operate and market the volumes of B4 in return for an at-cost asset utilization fee”, OMV said.
“It will provide both entities with financial flexibility while delivering an estimated $400 million in cumulative net profit over the next three years and representing approximately 10 percent annual accretion to earnings to Borouge PLC post ramp-up.
“It is anticipated that the agreement for B4 will be maintained until Borouge Group International AG acquires the asset from its current owners, which is currently not expected before 2029, thereby providing flexibility on the timing of future capital outlays.
“B4 operations are expected to ramp up progressively throughout 2026 and with the signing of the agreement, Borouge Group International AG will have access to 13.6 million tonnes of nameplate production capacity across Europe, the Middle East and North America, positioning the company as the world’s fourth-largest polyolefins producer”.
“The formation of Borouge Group International AG, through the combination of Borouge PlC and Borealis and acquisition of NOVA Chemicals, is progressing according to plan, with the transactions close expected by the end of March 2026, subject to customary conditions”, OMV said.
Austria’s state-backed OMV owns 75 percent of Vienna-based Borealis while ADNOC holds the remaining 25 percent. In Abu Dhabi-based Borouge, ADNOC directly owns 54 percent while Borealis owns 36 percent.
ADNOC and OMV would each own 46.94 percent of the JV. The remaining 6.12 percent would be publicly floated on the Abu Dhabi exchange, with plans for later listing on the Vienna bourse.
To contact the author, email jov.onsat@rigzone.com
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