Dubai's government aims to raise Dh3 billion ($817 million) from the sale of a 20 per cent stake in the emirate's toll operator, Salik.
The company set the offering share price at Dh2 a share, valuing the company at Dh15bn, Salik said on Tuesday.
Cornerstone investors have committed up to Dh606m to the initial public offering. They include the UAE Strategic Investment Fund, Dubai Holding, Shamal Holding and the Abu Dhabi Pension Fund.
The government is selling 1.5 billion shares in Salik as it looks to boost the size of Dubai's capital markets.
The first and third tranche offering for retail investors and eligible employees runs from September 13 to September 20. The second tranche offering for professional investors closes on September 21.
As part of the qualified investor offering, 5 per cent of the offering will be reserved for offer to the Emirates Investment Authority. The same amount will be reserved for offer to the Pensions and Social Security Fund of Local Military Personnel.
The government will retain 80 per cent in the company after the offering and Salik is expected to list on the Dubai Financial Market on September 29.
“We are delighted by the strong interest we have received since announcing our intention to float,” said Salik's chief executive Ibrahim Al Haddad.
“As a technologically advanced core infrastructure asset positioned to benefit from Dubai’s expansion plans, and given its unique capex-light business model, we believe Salik represents an attractive investment proposition for both institutional and retail investors.”
Salik is Dubai’s sole toll gate operator and currently operates eight automatic toll gates throughout the emirate, where more than 60 per cent of commuters use private cars.
Salik’s net toll traffic from 2013 through to 2019 grew at a compound annual rate of 5.5 per cent, driven by Dubai’s expanding economy and population.
As of April 30, Salik had 3.6 million vehicles registered, out of which 1.8 million were Dubai vehicles.
Dubai, home to 3.5 million permanent residents and with a daytime population of 4.5 million as of December, forecast that its population will grow by more than 70 per cent from 2020 to 2040. The emirate expects to host 25 million visitors by 2025.
“The growth of the city is in tandem with the growth of Salik, and this offering represents an exciting opportunity for investors to be a part of that journey,” Mr Al Haddad said.
Salik's offering is part of Dubai's plans to list 10 state-owned companies to increase the size of its financial market to about Dh3 trillion. Dubai also 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.
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Some of the biggest listings in UAE since 2021 — in pictures
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Abu Dhabi Ports - $1.1 billion IPO in February 2022: AD Ports Group raised $1.1bn from its share sale to help expand its operations globally and boost growth. ADQ, one of the region’s largest holding companies, remains a majority shareholder in AD Ports Group with a 75.44 per cent stake in the listed entity. Reuters -
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 in April 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. AFP -
Yahsat – $730.6 million in July 2021: a unit of Mubadala Investment Company, it raised about $731m from its initial public offering last July. It sold 975.9 million shares, or 40 per cent of equity, through the IPO, which was several times oversubscribed, with significant demand from both qualified institutional and retail investors in the UAE. Photo: Mubadala Investment Company -
Adnoc Drilling - $1.1 billion IPO in October 2021: Adnoc Drilling’s share sale, oversubscribed more than 31 times, was the largest listing on the ADX, raising more than $1.1 billion. Adnoc maintains its majority 84 per cent stake in the company while US energy services company Baker Hughes, which entered into a strategic partnership with Adnoc Drilling in October 2018, has a 5 per cent stake, and US contract oil and gas driller Helmerich & Payne holds 1 per cent. Photo: Adnoc -
Fertiglobe- $795 million in October 2021: a joint venture between Adnoc and Netherlands-listed OCI, raised about $795m in its initial IPO last year, amid strong demand from international, regional and local investors. The company — which is also the Mena region’s largest producer of nitrogen fertilisers by production capacity — sold more than 1.145 billion shares, representing 13.8 per cent of its share capital. Photo: Fertiglobe
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The Dubai Water and Electricity Authority 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.
Tecom, the operator of business districts in the emirate, also made its debut on the DFM in early July, having raised Dh1.7bn from its IPO a month earlier.
Salik expects to start paying dividends twice annually, in April and October of each fiscal year.
The company will pay a first dividend for the second half of 2022 by April 2023. It plans to pay 100 per cent of its net profit as dividends, after setting aside statutory reserves required by law.
Salik reported Dh944.9 million in revenue in the first half of 2022, up from Dh792.9m in the same period of 2021.
Profit for the first six months of this year rose to Dh796.7m, compared with Dh634.4m in the same period a year ago.
Full-year revenue is projected to exceed the Dh1.69bn earned in 2021, Mr Al Haddad told The National earlier this month. Last year's revenue grew from the Dh1.38bn earned in 2020.
