The Dubai Electricity and Water Authority has revealed that 6.5% of its shares will be listed on the Dubai Financial Market (DFM).
The move by the utility is the first of ten IPOs of state companies planned by Dubai as it seeks to revive trading on its bourse and catch up with Abu Dhabi and Riyadh, which have both seen multiple listings in recent months.
The DEWA shares’ offer price will be announced ahead of the start of the offer period on March 24 and runs until April 2.
Dewa will make 3.25 billion shares available in the offering, representing 6.5 per cent of its issued share capital, the company said on Tuesday. All the shares are existing shares being sold by the government of Dubai and the company will not receive any proceeds from the offering.
The Dubai government retains the right to increase the size of the offering at any time, subject to regulatory approval, before the end of the subscription period.
“Today represents a significant moment in the history of Dewa and is an important step towards achieving our vision for capital markets in Dubai,” said Sheikh Maktoum bin Mohammed, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance.
“As a central component of the Dubai economy, Dewa has a critical role to play in supporting the future growth of the emirate and its transition to a net-zero economy by 2050. For Dewa’s potential new shareholders, this offering is an opportunity to be part of the future of Dubai and have a stake in an organisation that has an unparalleled track record of technological innovation and operational excellence.”
The offering will be made available to individual and other investors as part of the UAE retail offering, as well as to professional investors outside the US, including the UAE, as part of the qualified investor offering.
The UAE retail offering subscription period is expected to run from March 24, 2022, to April 2, 2022. The qualified investor offering subscription period is expected to run from March 24, 2022, to April 5, 2022. Admission of shares to trading on the DFM is expected in April 2022.
“This is a historical moment for Dewa as the first government entity in Dubai to go public,” said managing director and chief executive Saeed Al Tayer.
“Dubai’s fast-paced development has resulted in a rapid increase in the demand for electricity and water. And Dewa has grown along with Dubai’s expanding economy, population and world-class competitive infrastructure, emphasising the emirate’s position as a global city.”
After the offering, Dewa intends to pay dividends twice each financial year — in April and October. A minimum dividend of Dh6.2 billion per annum is expected to be paid over the next five years, from October 2022 to April 2027, the company said.
Dubai Electricity and Water Authority (DEWA) is set to boost trading activity at The Dubai Financial Market following its recent announcement of plans for an initial public offering (IPO).
Following the listing plans announcement in November, DEWA invited banks to pitch for a role on an initial public offering that could value the utility at around $25bn.
The public utility announced that Moelis was its adviser on what still appears be the emirate’s biggest listing yet.
DEWA caters to Dubai’s 3.4 million residents and had 12.3 gigawatts of power capacity last year, according to its website. It reported net income of $1.3bn for 2019.
The move also comes as Dubai and the wider Gulf economies recover from last year’s coronavirus pandemic and oil-price crash.
Last year, Dubai announced its plan to IPO companies. It’s said that DEWA and Salik, which collects road tolls, will be among the 10 firms, but hasn’t revealed the names of the rest.