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DEWA is looking to sell a 6.5% stake by offering 3.25 billion shares in its IPO. However, the utilities outfit will not receive any proceeds.
The Dubai Electricity and Water Authority (DEWA) announced the first of ten planned initial public offering (IPO) listings on Tuesday. All the planned IPOs are for state-linked companies looking to revive the country’s domestic stock exchange, the Dubai Financial Market. Currently, the share prospectus posits that this will be the largest public offering of its kind in Dubai.
The total stake offered by DEWA, which goes public in April, is 6.5% at 3.25 billion shares in intention to float (ITF). According to DEWA’s CEO Saeed Mohammed Al Tayer, “This is a historical moment for DEWA as the first government entity in Dubai to go public.”
In addition, Al Tayer stated that the company has the option of increasing the size of the offering beyond 6.5%. However, he also pointed out that this is subject to demand and market conditions.
Further Details on the DEWA IPO Initiative
The shares could list on the Dubai Financial Market as soon as April 12th, although the company will publicize a price range before then. According to the DEWA prospectus, the due date for the price range announcement is March 24th.
The retail subscription period will begin on March 24th and end on April 2nd, while the qualified investor subscription will end on April 5th. DEWA has said it intends to pay dividends twice every fiscal year, in April and October. Over the five years through to April 2027, the company expects to pay a minimum dividend amount of 6.2 billion dirhams per annum.
Several high-profile banks within and outside Dubai are handling the listing process. They include Citigroup, Emirates NBD Capital, HSBC Bank Middle East, Credit Suisse, EFG-Hermes, First Abu Dhabi Bank, and Goldman Sachs.
DEWA is listing to prop the Dubai stock market and allow it to compete more effectively against bigger exchanges in Abu Dhabi and Saudi Arabia.
According to Thomas Varghese, chief financial officer at DEWA, investor feedback so far on the planned IPO is positive. He also added that the offering will commence as scheduled, barring any global market disruptions from the Eastern European war.
DEWA Will Not Receive Proceeds from Listing
DEWA will not receive any proceeds from the offering as the Dubai government will remain the company’s major shareholder and majority owner. However, the electricity and water corporation said it would use the IPO to pursue some of its own personal agenda. DEWA is looking to explore new and innovative storage technologies in renewable energy. In addition, DEWA also seeks to scale up its district cooling services and expand into other regional markets, including Saudi Arabia and Qatar.
Other state-owned entities slated for listing by the government of Dubai include road toll system Salik and business park operator Tecom.