Dubai: Emaar Properties said on Sunday it plans to offer 20 per cent of its development unit in an Initial Public Offering, an amount lower than estimated by many. Investors had been expecting the company to float up to 30 per cent of the company.
The listing will take place in November on the Dubai Financial Market in November, marking the first IPO since 2015.
“The IPO of our UAE development business will allow potential investors an opportunity to participate in a pure-play UAE developer offering strong and stable cash flows and an attractive dividend yield,” said Mohammad Al Abbar, Chairman, Emaar Properties, in a statement.
The offering will be made available to qualified institutional investors from November 2 to 15, while the subscription period for individual and other investors is from November 2 to 13.
Lower dividend
“The cut in float will lower the expected one-off dividend from 1 dirham to 67 fils a share [implying a dividend yield of 7.7 per cent], at valuation of Dh 23.8 billion,” said Vrajesh Bhandari, Portfolio Manager, MENA Equities at Al Mal Capital.
Emaar Development is targeting the distribution of dividends of no less than $1.7 billion, to be paid over the next three financial years ending December 2020.
“For the dividend declared with respect to the 2018 financial year, the company intends to pay a portion in third quarter of 2018 as an interim dividend, with the remainder expected to be paid in second quarter of 2019,” the company said.
For the nine months to September 2017, the company recorded sales value of Dh15.4 billion, up 32 per cent over the same period last year. Gross profit margin was at 42 per cent from January through September, while the company had Dh10.2 billion till September.
BofA Merrill Lynch, EFG Hermes UAE Limited, Emirates NBD Capital, First Abu Dhabi Bank and Goldman Sachs International are the joint global coordinators for the offering. Emirates NBD and First Abu Dhabi Bank are the lead receiving banks.
