Dubai’s Salik becomes third state-owned firm to float IPO this year

 Dubai’s Salik becomes third state-owned firm to float IPO this year

Dubai government-owned road-toll operator Salik is set to offload 20% of its shares via an initial public offering (IPO), becoming the latest company to plan for a listing on the emirate’s stock exchange.

The subscription period will be open between September 13 and September 20 for retail investors, and on 21 September for qualified investors, Salik said in a statement.

It will be the third state-owned company to float its shares on the Dubai Financial Market this year. The other two that have already had their IPOs are power and water utilities company DEWA and the Tecom Group.

The Dubai government plans to list as many as 10 state-owned entities as it is looking to boost the size of the DFM to AED 3 trillion.

Salik didn’t disclose the amount it plans to raise or the valuation it is targeting. However, Reuters reported citing sources it didn’t identify that the company was looking to raise about $1 billion, implying a valuation of $5 billion. In comparison, Tecom raised $463 million while DEWA amassed more than $6 billion.

Salik also said it expects to pay as dividend 100% of the net profit, after keeping aside the statutory reserves required by law. The statutory reserves are expected to amount to AED37.5 million for the first dividend, it said.

The company said it will pay a dividend twice, in April and October of each fiscal year, with the first dividend for the second half of 2022 by April 2023.

Salik, which operates eight toll gates in Dubai, was converted into a public joint stock company in June. It said that it may implement a dynamic pricing model in order to try and reduce congestion on the roads of Dubai. Doing so will also boost its revenue, the company said.

Aman Malik

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