Empower sets share price range; seeks to raise Dh1.33b

Dubai's Emirates Central Cooling Systems Corporation (Empower) on Monday announced that it would sell one billion shares at an offer price range of Dh1.33 per share to raise up to Dh1.33 billion from its initial public offering.

In a statement, the world’s leading district cooling company said the IPO subscription period, which started on Monday is expected to close on November 7 for UAE Retail Investors and on November 8 for Qualified Investors.

Empower will determine the final offer price through a book-building process and would announce the same on November 9. The company expects to list the shares on Dubai Financial market on November 15.

The UAE Strategic Investment Fund, Shamal Holding, and Abu Dhabi Pension Fund will become cornerstone investors in the IPO with a total commitment of up to Dh335 million, the state-owned company said.

Ahmad bin Shafar, chief executive of Empower, the company planned to expand in the UAE and Saudi Arabia, Oman, Bahrain and Egypt.

"We have about 80 per cent of Dubai's market," Shafar said at the launch of IPO last week.

Empower is the fourth among the 10 state-linked entities scheduled to be listed on the DFM this year in a government programme aimed at boosting investor interest in the domestic stock exchange.

The Dubai Electricity and Water Authority (Dewa) and Emirates Power Investment (EPI), an indirectly wholly-owned subsidiary of Dubai Holding, which are selling the shares in Empower reserve the right to amend the size of the offering at any time prior to the end of the subscription period at their sole discretion, the statement said.

Empower’s share flotation is in line with the Dubai government's plan to list 10 major entities to boost the size of the emirate’s capital market to Dh3 trillion and to set up a Dh2 billion market maker that is expected to give a further fillip to the UAE ongoing IPO boom by encouraging the listing of more private companies from sectors such as energy, logistics and retail.

Following the IPO, empower intends to adopt a semi-annual dividend distribution policy and to pay dividends twice each fiscal year after the offering in April and October of each year, the company said.

The last Dubai state-linked IPO was in September when Salik raised Dh3.73 billion from the sale of a 24.9 per cent stake. Tecom, another state-owned company that operates business districts in Dubai, made its debut on the DFM in early July with a Dh1.7 billion IPO in August. Dubai's utility major Dewa raised Dh22.41 billion from its IPO earlier in the year, making it the largest public float in the Middle East and Europe since Saudi Aramco went public.

— issacjohn@khaleejtimes.com