Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, has issued a regulation to turn the emirate’s road toll operator Salik into a public joint stock company before its potential initial public offering.
Under the Law No. (12) of 2022, the government of Dubai owns all the shares of Salik Company, the Dubai Media Office said in a statement on Wednesday.
“The Executive Council of Dubai is authorised to determine the percentage of shares that can be offered for subscription either through an IPO or private placement,” the statement said.
The company will have “legal, financial and administrative autonomy to carry out its activities and achieve its objectives”, it added.
It did not specify when or what percentage of shares the government plans to sell in Salik.
Dubai announced plans in November to list 10 state-owned companies to increase the size of its financial market to Dh3 trillion ($816.8 billion), as well as set up a Dh2bn market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.
Officials said last year that Salik will be among the public entities listed on the Dubai Financial Market.
Last week, the emirate announced the listing of 12.5 per cent of Tecom Group, the operator of business districts that are home to more than 7,800 companies, on the DFM.
Dubai Holding will sell 625 million shares in Tecom, which comprises 10 business districts that include Dubai Internet City, Dubai Media City and Dubai Design District, the company said at the time.
The price range for the listing will be announced on June 16, the same day when the IPO subscription starts.
The Tecom listing follows the share sale of the Dubai Electricity and Water Authority in April. The 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.
Dewa raised Dh22.41bn from its IPO, making it the largest public float in the Middle East and Europe since Saudi Aramco went public in 2019.
Effective from the date of its issuance, the new legislation announced on Wednesday sets up Salik Company with a 99-year term, which renews automatically for the same period as per the company’s articles of association.
The company, which has its headquarters in Dubai, can open branches and offices inside and outside the emirate, according to the statement.
The emirate’s Roads and Transport Authority (RTA) is authorised to outsource all or part of Salik’s functions related to the operation and management of toll gates.
“Pursuant to the law, proceeds from toll gates, including fees and fines, will be transferred to the company as per the concession contract signed between RTA and Salik,” the Media Office said.
Existing toll gates in Dubai can be removed or modified subject to a decree by the chairman of Dubai Executive Council. New toll gates can also be added subject to the council’s approval, once RTA conducts a “comprehensive traffic study in coordination with Salik”.
“Salik is exclusively authorised to operate, manage and develop the traffic toll system in Dubai,” the statement said.
The company is also responsible for implementing legislation related to toll gates and the development, operation and management of traffic systems as per contracts in Dubai and outside the emirate, it added.