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Two family-owned firms to turn joint stock companies

DUBAI - Two major Dubai-based family-owned firms have decided to convert themselves into joint stock companies by the end of the current year.

Public share issues of these two companies will be launched after completing the formalities required by the Ministry of Economy and Commerce.

Both companies have forwarded their applications to the concerned section of the Federal Ministry of Economy and Commerce, according to a well-informed source.

Declining to name the two premiere companies converting into joint stock companies, the source said the companies have massive investments in Dubai real estate and property market, construction, manufacturing, electro-mechanicals, healthcareand general trading. The two companies' capital and assets are estimated to total around Dh 13 billion.

The Ministry of Economy and Commerce when contacted declined to disclose the names of the companies, saying it is too early to reveal the names as the matter is in the initial stages and it will take a couple of months before it will be sorted out by the technical and legal departments. This is a major step being taken by these companies, it is a significant transformation which will initiate a new phase in the capital markets in the UAE and the region, the source said.

He said, "In last few months, a number of companies in Abu Dhabi and Dubai have shown great interest in going public and list their shares in the stock markets." I guess there is a qualitative shift in people's thinking and better understanding of market trends in the region and around the globe. "Businessmen are well aware of what is going on around them, hence they will take positive steps and liberate themselves from the traditional way of doing business which they have practised in the last 50 years. The government should strongly support the move and immediately allow it to see more such happenings in the market.

In a round table discussion on family businesses in the UAE organised by Dubai Chamber of Commerce and Industry last month, respected businessman Haj Saeed Lootah said, "Family businesses represented a transitional period in business, and they have to develop into effective businesses very soon. These companies are still doing well and have to a great extend adopted the latest trends in the market.

Prominent businessman Juma Al Naboodah, chairman of Al Naboodah Group of Companies, said "Family-owned corporations will rapidly change and streamline their businesses. The new generation, the future owners of these companies, have realised the need for new partners to help their business grow and achieve better profits in the future, added Al Naboodah.

Majid Saif Al Ghurair, in an interview with Khaleej Times, said," It is imperative for the UAE's family owned firms to undergo fundamental administrative and managerial restructuring before taking any step to list their shares in the stock markets."

Dr Omer Mohammed, Dubai-based economist and financial analyst, said," It will breathe life into the stock market and send a signal to all the family-owned companies in the region to consider the plan. It is very important for the rest of the family-owned companies to take a similar move to help themselves grow bigger."

Essa Kazim, director-general, Dubai Financial Market (DFM), said," The transformation of the family-owned corporations to public joint stock companies is a crucial move which will remarkably increase the capital of these companies and help them to expand their business beyond boundaries."