Dubai seeks to raise $817 million from road-toll operator’s IPO

According to an advertisement by Dubai-based Gulf News, the city government is selling 1.5 billion shares or 20% stake in Salik for 2 dirhams ($0.54). Cornerstone investors – UAE Strategic Investment Fund, Dubai Holding, Shamal Holding and Abu Dhabi Pension Fund – have committed up to dirham 606 million for the IPO.

The IPO is testing investors’ appetite for Middle East listings at a critical time. After a record start to the year, the Dubai Electricity and Water Authority and Tecum Group have started trading volatile due to economic challenges and weak oil prices, with underperforming in recent months.

Salik’s offering is part of a broader plan to list 10 state-owned firms to deepen the market. Bloomberg News reported that Emirates Central Cooling System could be the next bank appointed in August.

Arabic for open, Salik is an automated system introduced in 2007. The firm is a significant asset – nearly 60% of commuters in Dubai use private cars and net toll traffic grew at a compound annual growth rate of 5.5% from 2013 to 2019.

Dubai has said it may consider introducing dynamic pricing at its road toll gates as a way to reduce congestion and boost revenue in Salik, which it plans to expand with more gates.

The institutional offering will end on September 21, while the books for retail buyers will close a day earlier, with the stock expected to start trading the next day. Dubai Stock exchange on 29 September.

Emirates NBD Bank, Goldman Sachs Group Inc. And bank of america Corp. is the global coordinator, while Citigroup Inc., EFG-Herms and HSBC Holdings plc are the joint bookrunners on the offering. Emirates NBD and Moelis are financial advisors.

This story has been published without modification in text from a wire agency feed.

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