Dubai's Parkin to offer 24.99% stake in IPO

The company plans to list on the DFM on March 21

A parking sign in Dubai Marina. Chris Whiteoak / The National
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Parkin, the company set up by Dubai to oversee parking operations, will offer a 24.99 per cent in an initial public offering as the emirate continues efforts to boost its capital markets.

Established as a public joint stock company under a new law in January, Parkin will offer 749.7 million shares in the public float on the Dubai Financial Market, according to a prospectus issued by the company on Tuesday.

Subscriptions run from March 5 until March 12 for the first tranche for retail investors and end on March 13 for institutional investors.

Up to 10 per cent of the public float will be offered to retail investors, with a minimum subscription amount of Dh5,000 ($1,360).

As part of the qualified investor offering, 5 per cent will be reserved for the Emirates Investment Authority and 5 per cent for the Pensions and Social Security Fund of Local Military Personnel.

Shareholder Dubai Investment Fund reserves the right to amend the size of the offering “at any time prior to the end of the subscription period”, the Dubai Media Office said.

The price range for the offering will be announced on March 5 and the final offer price will be set on March 14.

The company plans to list on March 21.

“With its systemic role in Dubai’s transport ecosystem, now and in the future, Parkin will operate at the centre of the city’s exciting and ambitious growth plans,” said Mohamed Al Ali, chief executive of Parkin.

Parkin is the largest provider of paid parking spaces and services in Dubai, accounting for more than 90 per cent of the emirate's on and off-street paid parking market, according to the prospectus.

It operated about 175,000 on and off-street parking spaces across 85 locations, and close to 18,000 spaces across seven developer-owned parking lots as of the end of last year.

The entity is also responsible for issuing permits to drivers, enabling them to subscribe to public parking, use and operate it, and to reserve parking spaces.

It is also tasked with establishing, designing and managing private parking spaces, as well as investment in related business activities, among other responsibilities.

Parkin's revenue for the financial year ending December 31 climbed 13.5 per cent annually to Dh779.4 million.

The company's earnings before interest, taxes, depreciation and amortisation rose by 23 per cent during the period to Dh414.4 million, according to the prospectus.

Dubai announced plans in November 2021 to list 10 state-owned companies to increase the size of its financial market to Dh3 trillion, as well as set up a Dh2 billion market-maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.

Five state-owned enterprises have listed on the DFM since 2022.

The listing of Dubai Electricity and Water Authority was the largest GCC IPO in 2022, raising $6.1 billion.

State-owned Tecom, Salik and Empower collectively raised $2.2 billion in June, September and November 2022, respectively.

In November last year, Dubai Taxi Company raised $315 million from its IPO after recording an oversubscription level of 130 times in aggregate.

The GCC has been recording a boom in IPOs in recent years amid a push for privatisation, a growing appetite on the part of private sector companies seeking to raise capital and strong investor demand.

The UAE, the Arab world's second-largest economy, topped the GCC in terms of the funds raised last year through IPOs.

Issuers secured $6.07 billion from eight listings on UAE exchanges, accounting for about 56.3 per cent of total proceeds, according to data from Kamco.

The Abu Dhabi Securities Exchange was the top regional bourse with $4.9 billion, followed by the DFM with $500 million.

Parkin is the third unit from Dubai's Roads and Transport Authority that has been listed, after Salik and Dubai Taxi Company.

After the IPO, Parkin intends to pay a dividend in April and October, with the first payment expected in October this year in respect of the first half of 2024, the media office said.

The company expects to pay a minimum dividend payout of the “higher of 100 per cent of profit for the year and free cash flow to equity, subject to distributable reserves requirements”, it added.

Rothschild & Co Middle East has been appointed as the independent financial adviser for the IPO.

Emirates NBD Capital, Goldman Sachs International and HSBC Bank Middle East are serving as joint global co-ordinators and joint bookrunners.

Abu Dhabi Commercial Bank, EFG-Hermes UAE and First Abu Dhabi Bank have been appointed as joint bookrunners for the deal.

Updated: February 27, 2024, 9:56 AM