Tecom Group, a member of the Dubai Holding group circled the price range for its initial public offering (IPO) at between AED2.46 and AED2.67 per share in a statement issued on Thursday. Tecom’s IPO will be the second of 10 state-owned assets the Dubai government drives to boost trading volumes and increase liquidity on the exchange.
The owner, manager, and operator of the strategic, sector-focused business districts across Dubai said the final offer price would be bound through a book-building process and is expected to be announced on June 27, 2022. The major contributor to the rapid growth of Dubai’s knowledge and innovation-based economy, launched the subscription period for its IPO on the Dubai Financial Market (DFM). Tecom supports more than 7,500 companies and 10 large business complexes including Dubai Internet City and Dubai Media City.
The total offering size is expected to be between AED1.5 billion (USD419 million) and AED1.7 billion (USD454 million), implying a market capitalisation at the time of listing of between AED12.3 billion (USD3.4 billion) and AED13.4 billion (USD3.6 billion).
The operator of Dubai’s popular free zones said the UAE Strategic Investment Fund and Shamal Holding would be cornerstone investors in the IPO with a total assured investment of Dh283.75 million (USD77.25 million).
The Tecom Group in a statement said that the IPO subscription period would start from June 15, and run until June 23, 2022 for the UAE retail offering and June 24, 2022 for the qualified investor offering. Admission of the shares to trading on the DFM would be expected on July 5, 2022.
The Tecom Group’s issued share capital accounts for a total of 625 million shares, equivalent to 12.5 per cent, which would be offered to the investors. Dubai Holding Asset Management (DHAM) would reserve all rights to alter the size of the global offering.
The joint global coordinators and bookrunners include, First Abu Dhabi Bank, Emirates NBD Bank, Goldman Sachs Group Inc., Morgan Stanley and UBS Group AG.
Tecom’s Dividend policy
Tecom Group plans to implement a semi-annual dividend distribution policy and would be paying dividends in cash in October and April each year which would be subject to the board of directors and general assembly’s approval.
The statement added saying that the Company expects to pay a dividend amount of AED 800 million per annum over the next three years through to October 2025.
In the past few years Dubai’s stock market has protected peers in Abu Dhabi and Saudi Arabia after a series of high-profile state listings on those exchanges.