Foreign investors good for Emaar Malls IPO, says chairman

Mohamed Ali Alabbar says that the foreign investors had not got preferential treatment in the IPO over local investors.

The Emaar Malls Group IPO was 30 times oversubscribed by institutional investors. Jeff Topping / The National

Mohamed Alabbar, chairman of the UAE's leading developer Emaar Properties, said it is good to have a high number of foreign institutions involved in the initial public offering of its Dh38bn malls business, in which shares begin trading on Thursday on the Dubai Financial Market.

Speaking exclusively to The National after the first general assembly of Emaar Malls Group, Mr Alabbar said “The allocation of shares has all been very balanced. It is good to have foreign investors because they bring cash into the economy, and they bring good discipline for a quoted company.”

He said that the foreign investors had not got preferential treatment in the IPO over local investors. “We will have full details on Thursday when the shares are traded, but I can tell you the allocation will all be very balanced.”

The IPO was 30 times oversubscribed by institutional investors, including local, regional and foreign investors. This means institutions put up more than Dh121bn for just over Dh4bn worth of shares. Retail investors in the UAE were 20 times oversubscribed, with retail investors offering Dh34bn for Dh1.7bn of shares.

He told the meeting that the main burden of fees for the IPO, which has involved some of the biggest banks, accounting and law firms in the world, would be born by the holding company, which will continue to own 85 per cent of the shares in EMG.

Mr Alabbar said that the total cost of the IPO, amounting to some Dh130m, including underwriting fees, would be paid by Emaar Properties, apart from Dh100,000 of listing fees payable to DFM which EMG would pay.

“This is good practice, to pay the fees for a flotation yourself. You have got to be faithful to shareholders. If you roll a company out you have to carry the big cost yourself and let the shareholders have trust in you. You have to try to reduce the burden for new shareholders,” he added.

The meeting, in one of Emaar’s hotels by its flagship Dubai Mall, formally approved the incorporation of EMG, its directors, auditors and the listing of shares on the DFM.

“We must give a special thanks to Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, for his support. He has helped make Emaar comfortable and profitable,” Mr Alabbar told the meeting.

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