A medic at Burjeel Hospital in downtown Abu Dhabi holds a dose of a vaccine developed by Chinese drug maker Sinopharm. Victor Besa / The National
A medic at Burjeel Hospital in downtown Abu Dhabi holds a dose of a vaccine developed by Chinese drug maker Sinopharm. Victor Besa / The National
A medic at Burjeel Hospital in downtown Abu Dhabi holds a dose of a vaccine developed by Chinese drug maker Sinopharm. Victor Besa / The National
A medic at Burjeel Hospital in downtown Abu Dhabi holds a dose of a vaccine developed by Chinese drug maker Sinopharm. Victor Besa / The National

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Burjeel IPO: UAE healthcare provider may raise as much as $368m from offering

The subscription period for the offering runs from September 30 to October 4 for both retail and professional investors

Massoud A Derhally
Massoud A Derhally

September 30, 2022

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Abu Dhabi healthcare provider Burjeel Holdings may raise as much as Dh1.35 billion ($368 million) from an 11 per cent stake sale in the company's initial public offering.

The company plans to sell 550.7 million shares and set the offering share price between Dh2.00 and Dh2.45 a share, implying an equity value of $2.7bn to $3.3bn, it said in a statement on Friday. The final offer price will be determined through a book building process and is expected to be announced on October 5.

The offering includes 350.3 million shares sold by VPS Healthcare Holdings, which owns 79.8 per cent of Burjeel.

The subscription period for institutional and retail investors will open on September 30 and close on October 4. The company's shares will start trading on the Abu Dhabi Securities Exchange on October 10.

On September 19, Abu Dhabi’s International Holding Company, the UAE’s largest company by market value, bought a 15 per cent stake in Burjeel.

Burjeel Holdings, founded in 2007 by Dr Shamsheer Vayalil, has a network of about 61 assets, including hospitals and medical centres, as well as pharmacies and other allied services throughout the UAE and Oman. The company plans to enter Saudi Arabia with investments of up to $1bn planned in the Arab world’s largest economy through joint ventures and public-private partnerships.

Burjeel had revenue of nearly Dh3.4bn in the 2021 fiscal year, representing an 18 per cent compound annual growth rate from 2019 to 2021.

The company plans to pay cash dividends from 2023 onwards, on the expected basis of a payout ratio of 40 to 70 per cent of net income, depending on the required investment for additional growth plans.

In the absence of attractive investment opportunities it will distribute dividends at the upper end of the payout ratio range or potentially higher, it said.

The first interim dividend is expected to be paid in the second half of 2023 on the basis of net income for the first half of 2023.

Dubai Islamic Bank is the lead manager on Burjeel's IPO, while First Abu Dhabi Bank is lead receiving bank and International Securities is acting as financial adviser. JP Morgan is acting as capital markets adviser to the company and selling shareholder.

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Who is Allegra Stratton?

 

  • Previously worked at The Guardian, BBC’s Newsnight programme and ITV News
  • Took up a public relations role for Chancellor Rishi Sunak in April 2020
  • In October 2020 she was hired to lead No 10’s planned daily televised press briefings
  • The idea was later scrapped and she was appointed spokeswoman for Cop26
  • Ms Stratton, 41, is married to James Forsyth, the political editor of The Spectator
  • She has strong connections to the Conservative establishment
  • Mr Sunak served as best man at her 2011 wedding to Mr Forsyth
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Countdown to Zero exhibition will show how disease can be beaten

Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a  month before Reaching the Last Mile.

Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.

 

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Updated: September 30, 2022, 5:33 AM
MarketsUAEAbu Dhabi