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Dubai's Road-Toll Operator Salik to Sell 20% Stake in IPO

One of Salik’s eight toll gates, where 1.6 million vehicles pass daily (Asharq Al-Awsat)
One of Salik’s eight toll gates, where 1.6 million vehicles pass daily (Asharq Al-Awsat)
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Dubai's Road-Toll Operator Salik to Sell 20% Stake in IPO

One of Salik’s eight toll gates, where 1.6 million vehicles pass daily (Asharq Al-Awsat)
One of Salik’s eight toll gates, where 1.6 million vehicles pass daily (Asharq Al-Awsat)

Salik Company, Dubai’s exclusive road-toll operator, announced a plan to proceed with an initial public offering (IPO) and to list its ordinary shares for trading on the Dubai Financial Market (DFM).

This step is a continuation of the privatization program pursued by Dubai and its plans to double the size of its financial market to three trillion dirhams ($816.5 billion) and attract foreign investments.

In a statement on Monday, Salik said that 1.5 billion shares, each with a nominal value of AED0.01, will be made available in the IPO, representing 20% of Salik’s total issued share capital.

It added that the offering comprises Individual Subscribers (first tranche), Professional Investors (second tranche), and Eligible Employees (third tranche).

The subscription period will open on September 13 and is expected to close on September 20 for UAE Retail Investors and on September 21 for Qualified Investors.

According to the statement, Dubai’s government, represented by the Department of Finance (the Selling Shareholder), reserves the right to amend the size of the offering at any time prior to the end of the subscription period at its sole discretion, subject to applicable laws and the approval of the Securities & Commodities Authority (SCA).

The share capital of the Company, as at the date of the listing, has been set at AED75 million ($20.4 million), divided into 7.5 billion shares paid-in-full. The value of each share is AED0.01.

The offer price per share will be determined through, and following, a book building process. Investors participating in the UAE Retail Offering will subscribe for the shares at the offer price.

Following the IPO, Salik intends to pay dividends twice, in April and October of each fiscal year.

It expects to pay a first dividend for H2 2022 by April 2023, and it expects to pay 100% of the net profit, after keeping aside the statutory reserves required by law (statutory reserves expected to amount to AED37.5 million for the first dividend).

Mattar al-Tayer, Chairman of Salik’s Board of Directors, said that Dubai has succeeded in laying a clear economic path and an ambitious growth plan that includes attracting direct strategic investments.

He further stated that the Company is in a prime position to benefit from additional growth opportunities and is designed to ensure efficient operations.

“It is underpinned by an effective regulatory framework that supports future growth, and a business model that requires low capital expenditures. It also boasts cash conversion margins that are considered best-in-class.”

CEO of Salik Ibrahim Sultan al-Haddad, for his part, said that the IPO represents an important milestone in Salik’s journey, as it provides the company with an opportunity to consolidate its success as an exclusive operator of toll gates in Dubai, currently operating eight gates distributed in strategic locations across the busiest corridors of the Emirate.

The Company’s long-term principles and values are centered around customers, the environment, human capital, and modern technologies.

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IMF Sees Steady Global Growth

FILED - 24 October 2024, US, Washington: The logo of the International Monetary Fund (IMF) is seen on the facade of the conference building on Pennsylvania Street. Photo: Soeren Stache/dpa
FILED - 24 October 2024, US, Washington: The logo of the International Monetary Fund (IMF) is seen on the facade of the conference building on Pennsylvania Street. Photo: Soeren Stache/dpa
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IMF Sees Steady Global Growth

FILED - 24 October 2024, US, Washington: The logo of the International Monetary Fund (IMF) is seen on the facade of the conference building on Pennsylvania Street. Photo: Soeren Stache/dpa
FILED - 24 October 2024, US, Washington: The logo of the International Monetary Fund (IMF) is seen on the facade of the conference building on Pennsylvania Street. Photo: Soeren Stache/dpa

The International Monetary Fund expects the world economy to grow a little faster and inflation to keep falling this year. But it warned that the outlook is clouded by President-elect Donald Trump’s promises to slash US taxes, impose tariffs on foreign goods, ease regulations on businesses and deport millions of immigrants working illegally in the United States.

The Washington-based lending agency expects the world economy to grow 3.3% this year and next, up from 3.2% in 2024. The growth is steady but unimpressive: From 2000 to 2019, the world economy grew faster – an average of 3.7% a year. The sluggish growth reflects the lingering effects of big global shocks, including the COVID-19 pandemic and Russia's invasion of Ukraine.

The IMF is a 191-nation lending organization that works to promote economic growth and financial stability and to reduce global poverty.

Global inflation, which had surged after the COVID-19 pandemic disrupted global supply chains and caused shortages and higher prices, is forecast to fall from 5.7% in 2024 to 4.2% this year and 3.5% in 2026.

But in a blog post that accompanied the release of the IMF’s latest World Economic Outlook report, the fund’s chief economist, Pierre-Olivier Gourinchas, wrote that the policies Trump has promised to introduce “are likely to push inflation higher in the near term,” The Associated Press reported.

Big tax cuts could overheat the US economy and inflation. Likewise, hefty tariffs on foreign products could at least temporarily push up prices and hurt exporting countries around the world. And mass deportations could cause restaurants, construction companies and other businesses to run short of workers, pushing up their costs and weighing on economic growth.

Gourinchas also wrote that Trump’s plans to slash regulations on business could “boost potential growth in the medium term if they remove red tape and stimulate innovation.’’ But he warned that “excessive deregulation could also weaken financial safeguards and increase financial vulnerabilities, putting the US economy on a dangerous boom-bust path.’’

Trump inherits a strong US economy. The IMF expects US growth to come in at 2.7% this year, a hefty half percentage point upgrade from the 2.2% it had forecast in October.

The American economy — the world's biggest — is proving resilient in the face of high interest rates, engineered by the Federal Reserve to fight inflation. The US is benefiting from a strong job market that gives consumers the confidence and financial wherewithal to keep spending, from strong gains in productivity and from an influx of immigrants that has eased labor shortages.

The US economy’s unexpectedly strong performance stands in sharp contrast to the advanced economies across the Atlantic Ocean. The IMF expects the 20 countries that share the euro currency to collectively grow just 1% this year, up from 0.8% in 2024 but down from the 1.2% it was expecting in October. “Headwinds,” Gourinchas wrote, “include weak momentum, especially in manufacturing, low consumer confidence, and the persistence of a negative energy price shock’’ caused by Russia’s invasion of Ukraine.

The Chinese economy, No. 2 in the world, is forecast to decelerate – from 4.8% last year to 4.6% in 2025 and 4.5% in 2026. A collapse in the Chinese housing market has undermined consumer confidence. If government doesn’t do enough to stimulate the economy with lower interest rates, stepped-up spending or tax cuts, China “is at risk of a debt-deflation stagnation trap,’’ Gourinchas warned, in which falling prices discourage consumers from spending (because they have an incentive to wait to get still better bargains) and make it more expensive for borrowers to repay loans.

The IMF forecasts came out a day after its sister agency, the World Bank, predicted global growth of 2.7% in 2025 and 2026, same as last year and 2023.

The bank, which makes loans and grants to poor countries, warned that the growth wasn’t sufficient to reduce poverty in low-income countries. The IMF’s global growth estimates tend to be higher than the World Bank’s because they give more weight to faster-growing developing countries.