Dubai's Tecom Group, the operator of business districts that are home to more than 7,800 companies, may raise as much as Dh1.67 billion ($455 million) from its initial public offering on the Dubai Financial Market.
The company set its offering price range between Dh2.46 and Dh2.67 a share, valuing it at between Dh12.3bn and Dh13.4bn, Tecom said on Thursday.
Dubai Holding will sell 625 million shares, or 12.5 per cent in Tecom, as part of a series of IPOs of state enterprises aimed at boosting the size of the emirate's capital market.
The UAE Strategic Investment Fund and Shamal Holding will be cornerstone investors in the IPO, with a total commitment of Dh283.75m ($77.3m).
Tecom comprises 10 business districts that include Dubai Internet City, Dubai Media City and Dubai Design District.
The subscription period for retail investors runs from June 16 to June 23, and until June 24 for qualified institutional investors.
The final offer price will be determined through a book-building process and will be announced on June 27, with Tecom shares beginning to trade on the Dubai stock exchange on July 5, subject to market conditions and the obtaining of relevant regulatory approvals in the UAE.
Last year, Dubai announced plans to list 10 state-owned companies as part of its strategy to double the size of its capital market to Dh3 trillion and attract foreign investment.
The emirate also announced plans to set up a Dh2bn market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.
The Dubai Electricity and Water Authority — which operates as a vertically integrated multi-utility, with business activities including electricity generation, transmission and distribution, water desalination and district cooling — was the first government entity to list on the DFM.
The utility, which listed shares in April in the largest public float in the Middle East and Europe since Saudi Aramco went public in 2019, raised Dh22.41 billion ($6.1bn) from its IPO.
Tecom said its current available land bank of 375.3 hectares (40.4 million square feet) and access to additional land through an exclusive right of first offer with Dubai Holding Asset Management serve as a bedrock for future growth.
Nine of Tecom's 10 business districts are located in free zones that permit 100 per cent foreign ownership, with tenants including Meta, Google, Visa, BBC, CNN, Unilever and Dior.
The districts allow the complete repatriation of profits and employ more than 100,000 people in areas related to non-oil sectors that include technology, media, science, education, design and manufacturing.
Dubai's purchasing manager's index for the month of May showed that the emirate's non-oil business conditions hit a 35-month high, rising to 55.7, from 54.7 in April. This was the highest reading since June 2019.
Tecom has said it intends to pay dividends semi-annually — in October and April of each year, subject to the approval of its board and general assembly.
The company expects to pay a dividend of Dh800m annually over the next three years through to October 2025.
Tecom had about Dh1.77bn of revenue and Dh1.17bn in earnings before interest, taxes, depreciation and amortisation (ebitda) in 2021, with a 66.3 per cent ebitda margin.
The group recorded Dh485m in revenue for the first quarter of this year and Dh349m in ebitda, with a 72 per cent ebitda margin.
The lead receiving bank is Emirates NBD. Other receiving banks include First Abu Dhabi Bank, Mashreq Bank, Emirates Islamic Bank, Dubai Islamic Bank, Ajman Bank, Commercial Bank of Dubai and Sharjah Islamic Bank.
Emirates NBD Capital, First Abu Dhabi Bank, Goldman Sachs, Morgan Stanley and UBS have been appointed as joint global co-ordinators and joint bookrunners.
Tecom Group operates the following business districts:
• Technology cluster: consists of Dubai Internet City and Dubai Outsource City.
• Media cluster: consists of Dubai Media City, Dubai Studio City and Dubai Production City.
• Education cluster: consists of Dubai International Academic City and the Dubai Knowledge Park.
• Science cluster: consists of Dubai Science Park.
• Design cluster: consists of Dubai Design District.
• Manufacturing cluster: consists of Dubai Industrial City.
COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors. Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E6.5-litre%20V12%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E725hp%20at%207%2C750rpm%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E716Nm%20at%206%2C250rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E8-speed%20dual-clutch%20auto%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3EQ4%202023%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C650%2C000%3C%2Fp%3E%0A
Brief scores:
Toss: Northern Warriors, elected to field first
Bengal Tigers 130-1 (10 ov)
Roy 60 not out, Rutherford 47 not out
Northern Warriors 94-7 (10 ov)
Simmons 44; Yamin 4-4
Juventus v Napoli, Sunday, 10.45pm (UAE)
Match on Bein Sports
Results
5pm: Maiden (PA) Dh80,000 (Turf) 2,200m, Winner: Zalman, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
5.30pm: Maiden (PA) Dh80,000 (T) 1,600m, Winner: Hisham Al Khalediah II, Fernando Jara, Mohamed Daggash.
6pm: Handicap (PA) Dh85,000 (T) 1,600m, Winner: Qader, Adrie de Vries, Jean de Roualle
6.30pm: Abu Dhabi Championship Listed (PA) Dh180,000 (T) 1,600m, Winner: Mujeeb, Fabrice Veron, Eric Lemartinel
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,600m, Winner: AF Majalis, Tadhg O’Shea, Ernst Oertel
7.30pm: Handicap (TB) Dh90,000 (T) 1,600m, Winner: Shanaghai City, Fabrice Veron, Rashed Bouresly
8pm: Handicap (TB) Dh100,000 (T) 1,400m, Winner: Nayslayer, Bernardo Pinheiro, Jaber Ramadhan
