Al Noor Hospitals London IPO may start a trend for UAE companies

A senior adviser on the upcoming flotation of Al Noor Hospitals in London says the deal can open up a pipeline for other UAE firms.

Al Noor Hospitals plans to raise US$150m from an IPO. Fatima Al Marzooqi/ The National

The upcoming flotation of the Abu Dhabi healthcare provider Al Noor Hospitals should pave the way for more UAE companies to IPO in London, a senior adviser on the deal said yesterday.

Al Noor Hospitals Group last week announced plans to raise US$150 million in an initial public offering on the London Stock Exchange.

"This deal clearly opens a new pipeline for issuers in the region and it will be fascinating to see how many other players tap into it," said Ahmed Ibrahim, the head of Al Tamimi's equity capital markets practice.

The law firm Al Tamimi & Company "advised Al Noor Hospitals Group to implement a restructuring of the group to enable the group's proposed listing on the London Stock Exchange", it said in a statement.

"As a result of the restructuring, Al Noor Hospitals is a subsidiary of the UK public company which now controls the assets and businesses of Al Noor."

Al Noor had 227 operational beds and 461 physicians as of March 31 this year, according to its intention-to-list filing.

During the fiscal year ended December 31 2012, it made profits of US$60.5 million on revenues of US$324.4m, it said.

The healthcare industry in the UAE has experienced a surge of investment driven by a rapidly expanding population, rising incomes and a high incidence of chronic conditions such as cardiovascular disease and diabetes.

Al Noor's planned IPO follows public offerings by two Abu Dhabi-based companies in London over the past year.

Abu Dhabi Capital Management, an alternative investment firm, listed one of its funds on London's Alternative Investment Market.

At the time, the company said that the local markets did not have adequate liquidity to support such a listing and that they faced numerous other hurdles in attracting business.

NMC Health, founded by the Indian entrepreneur BR Shetty, raised $187m in a share sale, winning a primary listing on the LSE.

The UAE stock markets are showing signs of revival with volumes and asset values up in the past two years. But brokers said the trend towards listing abroad showed a continued "lack of confidence" in the UAE market.

"We considered all options available, and thought carefully and the best decision was to list in London," Sami Alom, the chief strategy officer at Al Noor, told The National in an interview last week. He cited the level of corporate governance standards, regulation and transparency among the reasons behind the move.