Dubai to List 12.5% ​​of Tecom on Dubai Capital Market in IPO

Dubai will list 12.5% ​​of Tecom Group, the operator of business districts that house more than 7,800 businesses, on the Dubai Financial Market (DFM) in a series of initial corporate public offerings to increase the size of the emirate’s capital market.

Dubai Holding will sell 625 million shares of Tecom, which comprises 10 business districts including Dubai Internet City, Dubai Media City, Dubai Design District, among others, the company said in a statement on Thursday.

The price range for listing will be announced on June 16, the same day the IPO begins. The subscription period for the first retail tranche and the third tranche will run from June 16 to June 23. The subscription period for the second tranche of qualified institutional investors will run from June 16 to June 24.

The Emirates Investment Authority is authorized to subscribe for up to 5% of the offering, and the percentage of shares it buys will be allotted in full before the start of the allotment to any other subscriber.

The selling shareholder reserves the right to vary the offer and the size and the expected date of listing on the Dubai Stock Exchange is July 5.

“As the core business development and leasing business of Dubai Holding, Tecom Group has helped play our key role in diversifying Dubai’s economy and driving innovation and the growth and development of businesses. companies,” said Amit Kaushal, Managing Director of Dubai Holding Group.

“We believe Tecom Group is ready to start a new chapter as a publicly traded company.”

Dubai Electricity and Water Authority, which operates as a vertically integrated multi-utility, with business activities such as power generation, transmission and distribution, water desalination and District Cooling, was the first government entity to be listed on the DFM.

The utility, which listed shares in April in the largest public float in the Middle East and Europe since Saudi Aramco went public in 2019, raised Dh22.41 billion ($6.1 billion) through its IPO.

Dubai last year announced plans to list 10 state-owned companies as part of its strategy to double the size of its capital market to 3 trillion dirhams and attract foreign investment. The emirate also announced its intention to create a 2 billion dirham market maker fund to encourage the listing of more private companies in sectors such as energy, logistics and retail. detail.

“For more than two decades…our company has succeeded in establishing a dynamic environment that enables existing and potential customers to amplify their growth ambitions while keeping pace with global industries and the future of the workplace” , said Malek Al Malek, President. from Tecom.

“With our intention to list on DFM, 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. The IPO offers investors a unique opportunity to ‘to be co-owners of a business that benefits from Dubai’s attractive underlying macroeconomic, industrial and business dynamics.’

Tecom said its currently available land bank of 40.4 million square feet and access to additional land through an exclusive right of first offer with Dubai Holding Asset Management provides the foundation for future growth.

Nine of Tecom’s 10 business districts are located in free zones, allowing for 100% foreign ownership with tenants including Meta, Google, Visa, BBC, CNN, Unilever and Dior. The districts allow full repatriation of profits and employ more than 100,000 people in fields related to non-oil sectors, including technology, media, science, education, design and manufacturing.

On Thursday, Dubai’s Purchasing Managers’ Index showed the emirate’s non-oil business conditions hit a 35-month high, hitting 55.7 in May from 54.7 in April. This is the highest reading since June 2019.

Tecom announced its intention to pay dividends semi-annually in October and April each year, subject to the approval of its board of directors and general meeting. The company plans to pay a dividend of 800 million dirhams per year over the next three years until October 2025.

Tecom recorded approximately MAD 1.77 billion in revenue and MAD 1.17 billion in earnings before interest, tax, depreciation and amortization (EBITDA) in 2021 with an EBITDA margin of 66.3%. The group recorded a turnover of 485 million dirhams for the first quarter of this year and an EBITDA of 349 million dirhams, with an EBITDA margin of 72%.

The main receiving bank is Emirates NBD. Other receiving banks include First Abu Dhabi Bank, Mashreq Bank, Emirates Islamic Bank, Dubai Islamic Bank, Ajman Bank, Commercial Bank of Dubai and Sharjah Islamic Bank.

Emirates NBD Capital, First Abu Dhabi Bank, Goldman Sachs, Morgan Stanley and UBS have been appointed as global co-coordinators and joint bookrunners.

Tecom Group operates the following business districts:

• Technology hub: Includes Dubai Internet City and Dubai Outsource City.

• Media hub: includes Dubai Media City, Dubai Studio City and Dubai Production City.

• Education Hub: Includes Dubai International University City and Dubai Knowledge Park.

• Science Hub: Includes Dubai Science Park.

• Design hub: includes the Dubai Design District.

• Manufacturing cluster: includes the industrial city of Dubai.

Updated: 09 June 2022, 05:07

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