Decks cleared for Dh220m Arabtec IPO

The Ministry of Economy and Commerce has approved the initial public offering of 220 million shares of common stock by Arab Technical Construction Co PJSC, which is under formation.

The Dh1 shares represent 55 per cent of the new public shareholding company's initial share capital of Dh400 million, according to a statement from Shuaa Capital, lead manager and book runner for the IPO.

The subscription period will extend from August 14 until August 23 and the appointed receiving banks are Dubai Bank, Emirates Bank, Mashreqbank and National Bank of Fujairah.

"We are very proud to be working closely with the founders of Arab Technical Construction Co PJSC and the four receiving banks on this deal," said Khalid Sifri, managing director of investment banking at Shuaa Capital.

"We believe this transaction will be extremely successful and will be considered as another important step in the continued development of the UAE's capital markets."

The founding shareholders who have subscribed to 180 million shares, representing 45 per cent of the company's capital stock, are Shaikh Butti Bin Maktoum Bin Juma Al Maktoum, Riad Burhan Kamal, Abraaj SPV 6 Ltd, Hussain Jasem Al Nowais, Thomas Patrick Barry, Shaikh Sultan Bin Saqr Al Qasimi, Ahmad Khalfan Al Daheri, Al Mazroui Holding Co LLC, Shaikh Nawaf Bin Nasser Al Thani, Raja Hani Ghanma and Grigoris C. Christ-ofides.

Subscription forms and prospectuses will be available at the Dubai Financial Market and the IPO designated branches of the receiving banks as of August 14.

The receiving banks will accept payment for the total subscription amount plus the subscription expense in the form of either a manager's cheque or bank remittance.

The objects of the new public shareholding company will be to invest in the contracting sector through the acquisition of existing contracting businesses, whereby it is hoped to benefit from the ongoing construction boom in the UAE.

Upon successful conclusion of the IPO, the company expects to use its capital for one or more specific investments in the contracting sector.

Makram Kubeisy, head of the corporate finance advisory at Shuaa Capital, said: "The construction sector in the UAE presents a lucrative investment opportunity for investors.

"The growth in the construction sector continues to be strong and has been fuelled by the government's economic liberalisation policies, along with the easing of foreign ownership restrictions in the real estate sector.

"A survey conducted by our department estimates that the value of announced mega-construction projects to be completed over the next five years in Dubai and Abu Dhabi is around Dh225 billion."