UPDATE 1-Dubai to offer 25% of taxi operator in IPO, testing market appetite
(Adds analyst comment in paragraph 7, context)
By Rachna Uppal
DUBAI, Nov 13 (Reuters) - Dubai plans to offer 25% of shares in its taxi business through an initial public offering (IPO), the company said in a statement on Monday, the latest public share sale as part of a broader privatisation programme of state assets.
Dubai Taxi Company (DTC), the largest taxi operator in the Gulf city state by market share, will offer 624.8 million shares, which are expected to list on the Dubai Financial Market in December.
The subscription period for the IPO will run from Nov. 21 to Nov. 28 for retail investors in the United Arab Emirates, and Nov. 29 for other investors, the statement said.
Dubai raised nearly $8.5 billion from five IPOs last year, fuelled by a government plan to list 10 state-linked companies to boost stock market activity, repay debt and deepen capital markets.
But unfavourable market conditions and global volatility this year have slowed momentum across the region.
Dubai's taxi IPO will also be a test for a strong pipeline of planned regional listings in the fourth quarter and into 2024 amid the Israel-Hamas conflict, which has unsettled markets.
"Despite a slow Q3 2023, we are still optimistic that the remainder of 2023 and 2024 will show a healthy number of IPOs on the MENA markets based on current pipelines," Gregory Hughes
EY's MENA (Middle East and North Africa) IPO leader said in a report dated Nov. 7.
"There is a risk that investor sentiment will be adversely impacted by the recent and ongoing geopolitical challenges in the region," Hughes added.
Last week, Investcorp Holding
raised
more than $450 million from an oversubscribed IPO of its investment unit, the first major public deal from the Middle East since the conflict escalated.
DTC has appointed Citigroup Global Markets Limited, Emirates NBD Capital, and Merrill Lynch International as joint global coordinators and bookrunners, and EFG Hermes UAE and First Abu Dhabi Bank as joint bookrunners on the deal.
Rothschild and Co Middle East is mandated as independent financial adviser.
Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai, earlier issued a law changing the legal status of the DTC, previously known as the Dubai Taxi Corporation, into a public joint stock company with financial and administrative independence. (Reporting by Rachna Uppal; editing by Miral Fahmy and Louise Heavens)
