Dubai gets set for IPO boom as utility giant DEWA offers 3.25b shares
DEWA will pay a 'minimum' of Dh6.2b a year as dividend - for next 5 years
Dubai: The Dubai Electricity & Water Authority (DEWA) will offload a 6.5 per cent stake – totalling 3.25 billion shares – as part of its ambitious IPO, the first out of ten Dubai Government owned entities that will list on DFM in the near term.
The DEWA shares’ offer price will be announced ahead of the start of the offer period on March 24 and runs until April 2. Thus the first steps have been taken in Dubai’s push to add some serious depth to its capital markets, and with the stated intention to raise the market cap of DFM (Dubai Financial Market) to Dh3 trillion.
The first tranche offer of 8 per cent (260 million), with a minimum subscription size of Dh5,000, is reserved for individual subscribers. The second tranche consisting of 90 per cent (2.925 billion) of offer shares is meant for professional investors. The base subscription has been set at Dh1 million. The third tranche offer of 2 per cent (65 million) will be available for eligible DEWA employees. (The Dubai Government retains the right to increase the size of the offering, subject to approval from the regulator, before the end of the subscription period.)
“Today represents a significant moment in the history of DEWA and is an important step towards achieving our vision for capital markets in Dubai," said Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and UAE Minister of Finance, in a statement.
"For DEWA’s potential new shareholders, this offering is an opportunity to be part of the future of Dubai and have a stake in an organisation that has an unparalleled track record of technological innovation and operational excellence.”
The Group expects to pay a minimum dividend amount of Dh6.2 billion per annum, over the next five years, amounting to a shareholder bonanza.
For the IPO, Emirates NBD Bank will be the lead receiving bank, while the likes of Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, the newly created digital bank Al Maryah Community Bank, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank, Mashreq Bank and Sharjah Islamic Bank are the receiving banks.
The Dubai Government will retain the rest of the stake. Dubai will likely follow up the DEWA listing with those of Salik, the road toll operator, Tecom and of Empower, according to market sources. This could make for a busy summer for the UAE stock markets and for its investors.
The DEWA stock float comes at a time when the utility provider is engaged in a host of mega-projects, not least the multi-phase Mohammed Bin Rashid Al Maktoum Solar Park, spread over a whopping 77 square kilometre area in Saih Al Dahal, about 50 kilometres south of Dubai city. It will be one of the world’s biggest renewable energy projects.
“Dubai’s fast paced development has resulted in a rapid increase in the demand for electricity and water," said Saeed Mohammed Al Tayer, Managing Director and CEO of DEWA. "And DEWA has grown along with Dubai’s expanding economy, population, and world-class competitive infrastructure, emphasising the emirate’s position as a global city.
DEWA employees applying for the shares must submit their requests – through platforms provided by the company – on or before April 2.
Citigroup Global Markets, Emirates NBD Capital and HSBC Bank Middle East are joint global coordinators, and Credit Suisse International, EFG-Hermes UAE Limited, First Abu Dhabi Bank PJSC and Goldman Sachs International will operate as joint bookrunners.