Al Habtoor Leighton eyes Dubai IPO

Dubai: Al Habtoor Leighton Group, the Dubai-based contractor that is constructing the Paris Sorbonne University campus in Abu Dhabi, plans to sell as much as 40 per cent of its shares in an initial public offering in May.

"The company doesn't need capital from the IPO, but it would benefit from the structure and demands that come with being a publicly traded company," Khalaf Al Habtoor, chairman of Al Habtoor Group, said in Dubai. "An IPO would guarantee the continuity of the company."

The Al Habtoor Leighton Group was established in September 2007 following the merger of Al Habtoor Engineering with the Gulf operations of Leighton International. Leighton is Australia's largest construction company and it is also controlled by Hoch-tief, Germany's biggest construction firm.

Gulf companies had initial share sales worth $4 billion in the first quarter, more than four times the value of IPOs a year earlier, Abu Dhabi-based Gulf Capital said in an April report. While the global credit slump triggered by US subprime mortgage losses stymies debt markets, Middle Eastern companies are turning to equity sales to raise growth capital as their economies expand by 9.2 per cent this year, according to Morgan Stanley forecasts.

HSBC Holdings and EFG-Hermes Holding are helping Al Habtoor Leighton Group arrange its planned share sale. Al Habtoor declined to comment on the amount of capital the company is planning to raise as the evaluation process is not complete yet.

DIFX

The Dubai-based firm plans to list its shares on the offshore Dubai International Finance Exchange because it allows companies to retain majority control and list minority stakes on its bourse, said Al Habtoor.

Dubai opened the DIFX in 2005 as it seeks to attract regional oil wealth and become a global financial centre. DP World, the fourth-biggest container-port operator, in November raised $4.96 billion from the Middle East's biggest initial public offering before listing on the DIFX.

The Emirates Securities and Commodities Authority, which regulates both onshore stock markets in Dubai and Abu Dhabi and is known as Esca, require companies to float no less than a 50 per cent stake. That may change once the UAE Companies Law is passed allowing firms to float as little as 30 per cent during an initial public offering, Mahmoud Ebrahim Al Mahmoud, a member of Esca's board, said in April.

"If the law changes by then, we may consider listing on the Dubai Financial Market," Al Habtoor said. The company is also considering secondary listings in London and Australia.