Dubai cost administrator set to raise more than $1bn subsequent to helping offering size

Dubai cost administrator

Dubai cost administrator | After increasing the size of the share it is selling in Salik, the toll operator, Dubai’s government now hopes to raise Dh3.735 billion ($1.017bn) in the IPO.

Due to high investor demand and oversubscription across all tranches, the emirate’s government will now sell more than 1.867 billion shares in the company, or 24.9%, up from the previously stated 1.5 billion shares, equivalent to 20%, it said on Friday.

The firm is anticipated to list on the Dubai Financial Market on September 29 under the symbol “SALIK” with an initial market capitalization of Dh15 billion. It will keep 75.1% of Salik’s current share capital.

The first and third tranches for retail investors and qualified personnel would grow to 145,725,000 ordinary shares from 120,000,000 after receiving approval from the UAE Securities and Commodities Authority. They make up around 7.8% of the total offer amount.

The second tranche will rise from 1,380,000,000 ordinary shares to 1,721,775,000 for qualified investors. It makes up roughly 92.2% of the offering.

The first, third, and second tranche offerings’ subscription periods will continue to be open through September 20 and September 21, respectively.

Cornerstone investors have committed the same amount of Dh606 million, or 16.2% of the increased offer size.

They consist of the Abu Dhabi Pension Fund, Dubai Holding, Shamal Holding, and the UAE Strategic Investment Fund.

The sale by Salik is a component of Dubai’s aspirations to float 10 state-owned businesses in order to nearly triple the size of its financial market to Dh3 trillion.

To encourage the listing of additional private companies from industries including energy, logistics, and retail, the emirate also intends to establish a Dh2 billion market maker fund.

In Dubai, where more than 60% of commuters drive privately owned cars, Salik is the only toll operator and now manages eight toll gates that employ radio frequency identification technology.

Salik’s net toll traffic increased at a compound annual rate of 5.5% between 2013 and 2019, propelled by Dubai’s growing economy and population. Salik had 3.6 million registered vehicles as of April 30, of which 1.8 million belonged to Dubai.

The population of Dubai, which as of December had 4.5 million daytime residents and 3.5 million permanent residents, is expected to increase by more than 70% between 2020 and 2040. By 2025, the emirate anticipates receiving 25 million tourists.

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