Major Free Zone Operator in Dubai Becomes Last to Offer IPO

Dubai, United Arab Emirates — A major free-zone operator in Dubai, owned by the ruler of the sheikhdom, said on Thursday it would make an initial public offering on the local stock market, the latest state asset to list in a bid to boost the stock market’s stock market. city-state promotion.

The TECOM Group, whose 10 holdings include Dubai Internet City and Dubai Media City, plans to offer 625 million shares in the Dubai Financial Market. TECOM said it plans to offer investors a dividend of $218 million per year for the next three years.

The offer would represent 12.5% ​​of all shares of TECOM, a subsidiary of Dubai Holding, part of the large government-owned corporations informally known as Dubai Inc. and under the supervision of the ruler, Sheikh Mohammed bin Rashid Al Maktoum.

TECOM reported revenue of more than $480 million in 2021, with profits close to $320 million.

“With our intent to list… we are expanding our contribution to Dubai’s financial market and strengthening our vision to further unlock the emirate’s economic and business growth potential,” said Malek Al Malek, TECOM’s chair.

TECOM said it hopes to start trading its shares on July 5.

The listing is part of a wider plan announced last November by Sheik Maktoum bin Mohammed Al Maktoum, the son of the ruler of Dubai, to list 10 state-owned companies in the stock market to boost their profile and raise new capital for the skyscraper-lined emirate.

Home to 3.5 million people, Dubai has seen a surge of interest as the sheikhdom weathered the pandemic and propped up its vital tourism and real estate markets. TECOM is one of the largest free zone operators in Dubai, allowing foreign companies to operate in a tax-free environment and retain 100% of their ownership.

Dubai’s Water and Electricity Authority, known as DEWA, ​​first began trading some of its shares in April after raising more than $6 billion during its IPO.

A renewed wave of IPOs has hit the Arab Gulf states, likely sparked by the listing of the Saudi Arabian Oil Co., or Saudi Aramco. Even long-haul carrier Emirates, the jewel of Dubai Inc., has been discussed as a possible IPO target.

But risks remain, especially after Yemeni Houthi rebels launched attacks on the country early this year.

“While the UAE continues to exercise de-escalation diplomacy and restraint, there can be no guarantee that tensions in the region will not continue to escalate, or that further attacks will not take place,” the prospectus warned.

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