Mubadala Investment Company's Al Yah Satellite Communications could raise as much as Dh2.98 billion ($811 million) through its coming initial public offering on the Abu Dhabi Securities Exchange.
The company, better known as Yahsat, has set a price range of between Dh2.55 and Dh3.05 per share for its listing. It is selling between 30 per cent and 40 per cent of its shares to retail and institutional investors through its debut listing, scheduled to take place on July 14.
The remainder will be held by Mamoura Diversified Global Holding, a wholly owned subsidiary of Abu Dhabi sovereign fund Mubadala.
"We have established a strong and proven operational and financial track record over the years which, coupled with the ever-growing adoption of technological solutions and promising prospects of the space industry in Abu Dhabi and the UAE more broadly, provides a compelling proposition for potential investors," said Ali Al Hashemi, Yahsat's chief executive.
"We look forward to their participation in Yahsat’s growth story.”
Yahsat was founded in 2007 and now operates in more than 150 countries across five continents.
Its five satellites reach more than two thirds of the world's population. A sixth is expected to launch in the second half of 2023 and begin commercial operations 12 months later.
The company provides its satellite infrastructure to both government and commercial customers.
It has a 15-year agreement with the UAE government signed in 2011 that provides "cash flow and visibility" of revenue and is an "important component of the country's National Space Strategy", it said in a statement announcing the pricing range.
Yahsat made a profit attributable to its owner of $68.9 million last year, more than double its 2019 profit of about $29.9m, despite a 7 per cent fall in revenue to $407.5m, according to an advertisement for the company's IPO published in the June 27th edition of The National.
The IPO market in the Mena region got off to a "slower than expected" start during the first three months of the year, with three company listings raising $295 million, compared with four companies raising $814m in the same quarter last year, consultancy firm EY said earlier this month.
In Saudi Arabia, Alkhorayef Water & Power Technologies raised $144m and Theeb Rent a Car raised $138m – both sold 30 per cent of their shares on the Tadawul stock market. Oman Reit, a real estate investment trust, raised $13.2m on the Muscat Stock Exchange.
"As we look at the remainder of 2021 and beyond, there are many reasons to be optimistic about the coming quarters ahead," said Gregory Hughes, EY Mena's IPO and transaction diligence head.
"A strong IPO pipeline in key Mena markets across sectors, coupled with various government initiatives to deepen the capital markets, particularly in Saudi Arabia and the UAE, should help bring more IPOs to markets in the region".
On Sunday, Tanmiah Food Company, a Saudi Arabian producer of meat and poultry products, also said it plans to list on Tadawul. It is offering six million shares, or 30 per cent of the company, and has set a range of 59 Saudi riyals to 67 riyals per share. Almost one million more shares could be offered to retail investors. If both offers are fully subscribed, the company would raise about 469m riyals ($125m) at the top of its range.
Most Gulf capital markets have made strong double-digit gains since the start of the year, with the Abu Dhabi Securities Exchange up 32.9 per cent so far this year as of Sunday's close.
Saudi Arabia's Tadawul index has gained 26.2 per cent and the Dubai Financial Market is up 15.2 per cent.
In January, the Abu Dhabi Securities Exchange, owned by state holding company ADQ, said it plans to double its market capitalisation within three years.
The exchange gained its newest entrant on Sunday, when Abu Dhabi's International Holding Company listed shares in Alpha Dhabi Holding, in which it holds a 45 per cent stake.
Alpha Dhabi, formerly known as Trojan Holding, employs about 40,000 people through 25 subsidiaries. The company earned a net profit of Dh218m last year on revenue of Dh3.8bn.