NH Investment joins in $10.1 bn Abu Dhabi deal for $1.3 bn stake

NH Investment & Securities Co. Ltd. will invest about 1.6 trillion won ($1.3 billion) in Abu Dhabi National Oil Company’s (ADNOC) gas pipeline business as a member of a six-strong group that has agreed to buy a stake in the Middle Eastern asset for a combined $10.1 billion.

The South Korean brokerage firm will secure a 6% stake in a new subsidiary of the state oil company, ADNOC Gas Pipeline Assets, with lease rights to 38 pipelines covering 982.3km, according to NH Investment.

In aggregate, the six-member consortium will hold a combined 49% of the subsidiary. The UAE state oil company will hold the majority stake of 51% and retain operating rights of the unit. They closed the transaction on June 17, NH Investment said.

The five other investors are Global Infrastructure Partners, Brookfield Asset Management, Singapore’s GIC, Ontario Teachers’ Pension Plan Board and Italian infrastructure company Snam.

NH Investment will finance the investment with a 20-year term with borrowings from global banks and sell down part of its interests to domestic institutional investors.

The transaction became the single biggest infrastructure investment by a South Korean brokerage company since three domestic securities firms – Samsung, Hanwha Investment and IBK -- acquired a 39.24% stake in Dunkirk LNG Terminal for around 850 billion won in France in 2018.

It also marked the biggest investment the Middle East has drawn for an energy infrastructure and the biggest in the world so far this year.

An ADNOC source said that the company would deploy the fresh capital in new strategic initiatives to diversify its business portfolio. To investors, the gas pipeline business is expected to generate steady cash flows.

NH Investment expects the transaction will become a stepping stone for Korean investors to expand their presence in the Middle East.

It will explore co-investment opportunities with ADNOC by building closer relationships with the oil giant as it plans to step up investment in the Middle East.

Write to Jaeyeon Koh and Seon Hangyeol at yeon@hankyung.com