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Empower raises retail offering to 300m shares on strong investor demand

The move, which has approval from the Securities and Commodities Authority, would result in the Qualified Investors Tranche being reduced from 1.9 billion to 1.7 billion ordinary shares

Emirates Central Cooling Systems Corporation (Empower) said on Tuesday that subsequent to significant demand and oversubscription from retail investors for its initial public offering, selling shareholders have increased the retail tranche size of the IPO.

The selling shareholders – Dubai Electricity and Water Authority (Dewa) and Emirates Power Investment, an indirectly wholly-owned subsidiary of Dubai Holding — have exercised their right to increase the number of shares offered to retail investors to 300 million from the initial size of 100 million ordinary shares.

Empower said in a statement that the move, which has approval from the Securities and Commodities Authority, would result in the Qualified Investors Tranche being reduced from 1.9 billion to 1.7 billion ordinary shares.

The offer size remains unchanged at 20 per cent of Empower’s share capital, with Dewa and Emirates Power continuing to own 56 per cent and 24 per cent of Empower’s existing share capital respectively following the offering.

“Based on the previously announced price range of Dh1.31 to Dh1.33 per share, the Retail Tranche will now be million, representing 15 per cent of the total deal size,” the company, one the world’s largest district cooling service providers said.

The new retail tranche size was determined by the selling shareholders and follows the announcement on November 4 to increase the offer size to 20 per cent, said the statement.

The subscription period remains unchanged, with closing dates on November 7, for UAE retail investors and on November 8 for qualified investors. Empower is expected to list on the Dubai Financial Market on November 15.

Empower's IPO is part of Dubai's drive to list 10 state-owned companies and increase the size of its financial market to about Dh3 trillion, as well as set up a Dh2 billion market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.

Dubai’s recent state-linked IPO was in September, when the emirate's toll operator Salik raised Dh3.73 billion from the sale of a 24.9 per cent stake. Tecom, another state-owned company that operates business districts in Dubai, made its debut on the DFM in early July with a Dh1.7 billion IPO in August.

Empower, which was set up as a joint venture in 2003 to provide energy through its various plants to the emirate's property sector, has become the world’s largest district cooling services provider, with 84 plant rooms and a network that is more than 350 kilometres long, according to its website.

The district cooling giant has a capacity of more than 1.64 million refrigeration tonnes and serves more than 140,000 corporate and individual consumers in more than 1,252 buildings. The company retains more than a 76 per cent market share in Dubai’s district cooling sector, according to its website.

— issacjohn@khaleejtimes.com