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Dubai: Tecom Group to offer 12.5% stake in IPO

Business park operator to list shares on DFM on July 5, institutional and retail investors can buy shares from June 16

Dubai on Thursday announced plans to sell a 12.5 per cent stake in Tecom Group through initial public offering and list the company on the Dubai Financial Market (DFM) by July 5.

It will be the second offering by the government this year to boost trading volumes and increase liquidity on the exchange after listing of Dubai Electricity and Water Authority which raised $6.1 billion in April.

The Tecom Group, whose 10 holdings include Dubai Internet City and Dubai Media City, plans to offer 625 million shares on the DFM. The government is aiming to raise at least $500 million from the listing, Bloomberg quoted people familiar with the matter.

Dh800m annual dividends

Tecom, a subsidiary of Dubai Holding, said it planned to offer investors dividends of Dh800 million ($218 million) per annum for the next three years. It reported having revenues of over Dh1.77 billion ($480 million) in 2021, with a profit of nearly Dh1.17 billion ($320 million).

Dubai Holding Asset Management (DHAM) will sell 625 million ordinary shares in Tecom in the offer that opens on June 16, the company said in a statement on Thursday.

IPO timeline

The Tecom Group’s global offering will be available to individual and other investors and to Dubai Holding Group eligible employees as part of the UAE retail offer. It will also be offered to professional investors and other investors in a number of countries outside the US, including in the UAE, as part of the qualified institutional offering and the exempt offer.

“The qualified institutional offering and the exempt offer subscription period is expected to run from June 16 until June 24, 2022, while the retail offer subscription period will run from June 16-23. The listing on DFM is likely to be on July 5," according to the statement issued on Thursday.

The price range will be announced on June 16, the same day when the IPO starts. Emirates NBD Capital and First Abu Dhabi Bank are among the joint lead managers.

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Diversifying Dubai’s economy

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, announced in November that the government will list 10 state-owned companies on the DFM to increase the size of the stock market in the Emirate to Dh3 trillion, raise the competitiveness of bourses and encourage IPOs.

"As Dubai Holding’s primary commercial development and leasing business, Tecom Group has helped execute our key role in diversifying Dubai’s economy and driving innovation and business growth and development. We have supported its growth into a successful creator of innovative business ecosystems and a partner of choice for multinational businesses as well as entrepreneurs in the region," Amit Kaushal, chief executive officer, Dubai Holding Group, said.

Tecom houses more than 7,500 companies and 10 large business complexes including Dubai Internet City and Dubai Media City. It has been at the forefront of Dubai’s economic growth and diversification by building and growing 10 world class, sector-focused business districts strategically located across the Emirate.

“We believe Tecom Group is ready to embark on a new chapter as a publicly listed company. By remaining the ultimate holding company of the company, we will remain fully committed to working alongside Tecom Group’s new shareholders to support its growth ambitions and further bolster its role as a key enabler of Dubai and the region’s knowledge-based economy,” Kaushal said.

Unlocking economic potential

Malek Al Malek, chairman of Tecom Group, said his company has succeeded in establishing a vibrant environment that enables existing and prospective customers to amplify their growth ambitions while evolving at pace with global industries and the future of the workplace.

“With our intention to list on DFM we are expanding our contribution to Dubai’s financial market and bolstering our vision to further unlock the Emirate’s economic and business growth potential. The IPO offers investors a unique opportunity to be part owners of a company that is benefiting from Dubai’s attractive underlying macroeconomic, industry, and business dynamics,” he said.

Driving new opportunities

Abdulla Belhoul, chief executive officer of Tecom Group, said the company is continuously growing its asset base and established strong customer loylty.

“At Tecom Group, we have continuously delivered on our role as a strategic business enabler of Dubai by bringing to life 10 world-class, vibrant, specialised business districts. Our commitment to digital transformation and ensuring a seamless customer journey sets us apart, providing advanced solutions to over 7,800 customers and more than 100,000 professionals," he said.

From 2021 up until the first quarter of 2022, he said Tecom Group achieved major milestones including the inauguration of regional headquarters, state-of-the-art higher education campuses, and research and development centres.

"Our track record demonstrates confidence in the Company and reaffirms Dubai’s leading role as the go-to destination for businesses looking to tap into new opportunities," he said.

"As Tecom Group embarks on its next chapter of growth through the IPO, we intend to continue to support the development of business ecosystems and strategic sectors in Dubai, while maximising synergies across these ecosystems and driving new opportunities in the high-growth industry segments Dubai has to offer,” he added.

IPO partners

Emirates NBD Capital, First Abu Dhabi Bank, Goldman Sachs International, Morgan Stanley & Co International and UBS, London Branch have been appointed as joint global coordinators and joint bookrunners for the IPO.

Emirates NBD Bank has been appointed as the lead receiving bank.

Moreover, Abu Dhabi Islamic Bank, Ajman Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank, Mashreq Bank, and Sharjah Islamic Bank, have also been appointed as receiving banks.

— muzaffarrizvi@khaleejtimrs.com