The initial public offering of Dubai-based district cooling provider Emirates Central Cooling Systems Corporation — better known as Empower — will happen “soon” but not in the current quarter, according to the chief executive of Dubai Electricity and Water Authority (Dewa).
"It [Empower's IPO] will be announced in due time, it won’t be in the current quarter of the year, probably at the end of the year," Saeed Al Tayer, who is also the managing director of Dewa, told Al Arabiya TV on Tuesday.
"We will announce the date at the right time," he said, without elaborating. Plans to list the company were first announced in December last year as part of Dubai’s strategy to boost its stock market and attract more capital.
Set up in 2003, Empower is a joint venture between Dewa and Dubai's Tecom Investments Group. The company, which has a 79.5 per cent share of of Dubai’s district cooling market, provides services to more than 1,400 residential, commercial, healthcare, hospitality, education, retail and entertainment buildings in the emirate.
The company reported a 4 per cent increase in its 2021 profit to Dh936 million ($255m) as revenue grew 9 per cent to Dh2.5 billion. In March, the company also announced a dividend of Dh500m to its shareholders for 2021. The total dividends paid to shareholders have amounted to Dh3.15bn since its inception, it said.
Dubai, which aims to boost its stock market amid a growing appetite for IPOs in the region, revealed plans last year 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 unveiled 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.
Earlier this month, Dewa became the first public entity to list on the Dubai Financial Market, raising Dh22.41bn in an oversubscribed share sale.
The IPO of the Dubai utility was the largest in Europe and the Middle East since Saudi Aramco’s debut in 2019. It has a market value of about $39bn and is the largest on the exchange.
Dewa will distribute Dh6.2bn in dividends annually, regardless of the size of the profits, Mr Al Tayer told Al Arabiya on Tuesday.
“The returns will be high for shareholders. The authority's cash flows are stable and it enjoys a strong operating performance,” he said.
“All shareholders will receive dividend returns equally in accordance with the law of the Securities and Commodities Authority.”
Dewa’s 2021 profit surged almost 75 per cent to about Dh7bn as demand for electricity rose in the emirate and the economy continues to recover strongly from the pandemic-driven slowdown.
Revenue reached Dh23.8bn and the value of assets at the end of 2021 climbed to Dh169.5bn.
Mr Al Tayer said the additional funds raised by the Dewa from the offer will not be used to reduce debt, as the proceeds will go to the selling shareholder, the Dubai government.
The next entity expected to be listed on the DFM is the Salik toll system, officials said last year. An IPO is also planned for Tecom Investments.
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Empower has been expanding its operations and last year acquired the district cooling schemes of Nakheel, Meydan and Dubai International Airport for more than Dh2bn in total. It also began operations of new district cooling plants in Za’abeel and Dubai Production City.
Last month, it awarded a Dh193m contract to build a new generation district cooling plant in Dubailand. The construction of the building has already started, and the first phase of the plant will be operational by the first quarter of 2023 with a production capacity of 23,500 refrigeration tonnes (RT).
The plant's total production capacity upon completion will reach 47,000 RT, Empower said.
