The initial public offering (IPO) of Mubadala Investment Company’s Al Yah Satellite Communications is set to raise Dh2.68 billion ($730 million).
The company's shares have been priced at Dh2.75 per share following the completion of its bookbuilding process, the satellite operator said. This is against an earlier indicative price range of Dh2.55 to Dh3.05 a share.
The company, better known as Yahsat, is selling 40 per cent of its shares to retail and institutional investors through its debut listing on the Abu Dhabi Securities Exchange (ADX), scheduled to take place on July 14.
The IPO was “multiple times oversubscribed”, with significant demand from both qualified institutional and retail investors in the UAE, Yahsat said.
Yahsat plans to sell 975.9 million shares through the IPO. Based on the final offer price, Yahsat’s market capitalisation upon listing is expected to be approximately Dh6.7 billion.
“We are dedicated to ensuring we meet and exceed investor expectations as we continue to grow by expanding our geographical reach, while continuously innovating and driving new technologies to meet the local, regional and global demand for reliable satellite connectivity and solutions,” Ali Al Hashemi, chief executive of Yahsat, said.
Yahsat was founded in 2007 and now operates in more than 150 countries across five continents. Its five satellites reach more than two thirds of the world’s population. A sixth is expected to launch in the second half of 2023 and begin commercial operations 12 months later. The company provides its satellite infrastructure to both government and commercial customers.
The IPO market in the Mena region got off to a “slower than expected” start during the first three months of the year, with three company listings raising $295m, compared with four companies raising $814m in the same quarter last year, consultancy firm EY said.
In Saudi Arabia, Alkhorayef Water & Power Technologies raised $144m and Theeb Rent a Car raised $138m – both sold 30 per cent of their shares on the Tadawul stock market. Oman Reit, a real estate investment trust, raised $13.2m on the Muscat Stock Exchange.
The Emirates Investment Authority has exercised its preferential right to subscribe to five per cent of Yahsat’s final offer size, the company said.
The remaining 60 per cent of shares will be held by Mamoura Diversified Global Holding, a wholly owned subsidiary of Abu Dhabi sovereign fund Mubadala.
The IPO represents the first IPO of a Mubadala subsidiary supported since inception, Yahsat said.
This is also the first major IPO on the Abu Dhabi bourse since Abu Dhabi National Oil Company Distribution listed 10 per cent of its shares in 2017.
The state oil company subsequently sold another 10 per cent stake and raised $1.64bn in May through the sale of new shares and the issue of exchangeable bonds in Adnoc Distribution, potentially pushing its free float on the ADX to 30 per cent.
First Abu Dhabi Bank, Merrill Lynch International and Morgan Stanley International were appointed as joint global co-ordinators and Abu Dhabi Commercial Bank, EFG Hermes UAE and HSBC Bank Middle East were appointed as joint bookrunners.
First Abu Dhabi Bank was appointed as the lead receiving bank and ADCB was appointed as a receiving bank.
The offering was declared Sharia-compliant by the internal sharia supervision committee of HSBC Bank Middle East, according to Yahsat.
It has a 15-year agreement with the UAE government signed in 2011 that provides “cash flow and visibility” of revenue and is an “important component of the country’s National Space Strategy”, Yahsat said.
Yahsat made a profit attributable to its owner of $68.9m last year, more than double its 2019 profit of about $29.9m, despite a 7 per cent fall in revenue to $407.5m, according to an advertisement for the company’s IPO published in the June 27th edition of The National.
The ADX, which expects 10 new stock listings this year, plans to double its market capitalisation over the next three years through its “ADX One” strategy.