After the curtain came down on the public offering of the Dubai Electricity and Water Authority (DEWA), which raised 22.3 billion dirhams, to be the largest in Europe and the Middle East in the past two years, the IPO market in the UAE is poised to record more successes this year.
It is expected that the introduction of the road toll system (Salik) will be the next.
The remarkable activity recorded by public offerings in Saudi Arabia and the UAE, which is expected to reach a historic level this year, has strengthened the presence of investment banks in these two countries in the hope of winning advisory roles, in light of the attractive opportunities for capital in the region.
This is noting that the decision to offer government companies comes within the framework of diversifying the economy away from oil and strengthening financial markets.
Last November, the Deputy Ruler of Dubai, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, announced the inclusion of 10 government and semi-governmental companies on the Dubai Financial Market (DFM), in a move that would support the financial sector in Dubai and stimulate the pace of growth in it.
Among the government companies that will be listed, in addition to “DEWA”, are the Emirates Corporation for Central Cooling Systems (Empower), “TECOM” Investments Group, and “SALIK”.
Hamed Ali, CEO of the Dubai Financial Market, says that the success of the DEWA offering opened the door wide, not only to the rest of the nine government offerings, but also to a lot of private companies “that we are in advanced talks with, and we expect to list some of them within the next 12 months.”
But who are the companies whose name is being publicized for listing on the Dubai Financial Market?
“Salik” is on its way
Last February, the Dubai Roads and Transport Authority (RTA) selected banks to arrange the inclusion of the Salik toll system on DFM. The banks are: Bank of America, Emirates NBD, and “Goldman Sachs” advisory services, and this following the selection of “Mollis & Co” as financial advisor.
Late last year, Sheikh Maktoum bin Mohammed bin Rashid approved a plan to list Salik on the DFM. He pointed out that “the Salik system is successful, and investing in it holds great opportunities.”
The Salik system was launched in Dubai in 2007. It is a fully digital gate system on Dubai’s roads, to collect tolls without having to stop to pay. It has eight gates and 3 million registered vehicles, of which 1.8 million are registered in Dubai, according to the Dubai Media Office. The gate system follows the technology to automatically identify the vehicle when you pass through it; The car owner’s Salik account deducts 4 dirhams as traffic fees for each gate.
Empower chooses Mollis & Co. to work on its launch
Empower, the world’s largest district cooling services provider, has chosen Mollis & Co. to work on its initial public offering (IPO) planned for this year, Bloomberg revealed.
Empower is working with Molis to organize its listing on the stock exchange. This will entail the appointment of registry managers to sell the shares.
Established in 2003, Empower is a joint venture between DEWA and TECOM Investment Group in Dubai. The company, which owns 79.5 percent of the district cooling market in Dubai, provides services to more than 1,400 residential, commercial, healthcare, hotel, educational, retail and entertainment buildings in the emirate.
The company announced a 4% increase in its profits for the year 2021 to reach 936 million dirhams ($ 255 million). Revenues grew by 9% to reach 2.5 billion dirhams.
In March, the company also announced a dividend of 500 million dirhams to its shareholders for the year 2021. It said the total dividends paid to shareholders amounted to 3.15 billion dirhams since its inception.
In 2021, Empower signed an agreement to acquire the cooling areas at Dubai International Airport for a value of 1.1 billion dirhams.
.. And its listing is expected in the fourth quarter
The CEO of Empower, Ahmed bin Shafar, had expected last February that the company would be listed on the Dubai market during the fourth quarter of this year.
He also revealed, in a statement in October 2021, about preparing for this in accordance with a government decision to offer in the financial market, noting that the idea of listing is now stronger due to the high value of Empower’s market assets, the plans of acquisitions that it signed, and the expansion plans inside and outside the UAE during the next stage. .
On October 7, Bin Shafar said that the value of the acquisitions made by the institution during the year 2021 is estimated at 2.2 billion dirhams.
TECOM takes its first steps
TECOM, the operator of business parks with offices for about 6,000 companies in Dubai, is also taking its first steps to enter the Dubai Financial Market. The
group agreed to a plan to transform itself into a public joint stock company before building a book of instructions for an IPO.
According to “Bloomberg”, the company’s shareholders agreed last month to convert from a limited liability company, according to an announcement published in the Dubai-based newspaper, Gulf News.
TECOM operates 10 large business parks such as Dubai Internet City, Dubai Media City, Dubai Design District and Dubai Industrial Park.
It has appointed Emirates NBD, First Abu Dhabi Bank, Goldman Sachs, Morgan Stanley and UBS Group to help arrange the potential IPO.
On April 1, TECOM obtained two loans worth 7.6 billion dirhams to refinance existing debt, ahead of the expected initial offering.
The largest loan that Tecom obtained from Dubai Islamic Bank and Emirates NBD, amounted to 4 billion dirhams for a period of 5 years. The second loan amounted to 3.6 billion dirhams, from First Abu Dhabi Bank and Emirates NBD.
List of public offerings
It is very likely that a share of Emirates Airlines will be offered for public subscription on the Dubai Financial Market.
The CEO of “Emirates Airlines”, Ahmed bin Saeed Al Maktoum, said in statements that “Emirates Airlines” group and its subsidiaries may contribute to the process of offerings that the DFM will witness during the coming period. This may include dnata, which is engaged in freight forwarding, ground handling, catering, retail and travel services.
Emirates Airlines is one of the most famous assets in Dubai. It was established in late 1984 to become one of the largest air transport companies in the world, operating from its base at Dubai International Airport with a fleet of wide-body aircraft.
It is wholly owned by the Government of Dubai and has developed a diversified business portfolio catering to a wide range of sectors in transportation and tourism.
It provides commercial air transportation for passengers and goods and provides postal and aviation transportation services, institutional catering and ground handling services, in addition to the wholesale and retail trade of consumer goods and food and beverages.
The company was impacted by the Corona pandemic. The decline of its main long-haul business led to its first loss in decades. The government has invested about $3.7 billion during 2020 to support the company in continuing its business.
The list of companies nominated for IPOs also include: “Dnata”, “Jumeirah Hotels”, “ENOC”, “Meraas” and “Nakheel”. There may be other names. Let’s keep watch.