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.
