Dubai edged closer towards its goal of becoming a global financial hub yesterday, aiming to raise up to $4.32 billion (£2.07 billion) through a partial flotation of DP World, one of the world’s biggest ports companies.
The state-owned shipping giant, which bought the British company P&O last year, announced it would sell 2.822 billion shares in an initial public offering, priced between $1 and $1.30 each. The company retains the option of issuing an additional 498 million shares, representing a 20 per cent stake in total.
It is the first time a major domestic company has chosen to list on the DIFX, representing a major boost for Dubai's fledgeling global stock exchange. The listing is seen as a test for other state-owned companies that are considering a float to drum up capital, including Emirates, the airline owned by the royal family.
Mohammed Sharaf, chief executive of DP World, said: “We are the first jewel in Dubai's crown to go. This opens the way and it is something others will be looking at.”
Dubai-based tourist, real estate and shipping companies have been encouraged to seek local financing to fund ambitious expansion projects that will transform the tiny emirate into a capital markets hub.
Mr Sharaf said proceeds from the DP World float would be used to pay off a loan used to buy P&O. Valued at up to $21.6 billion, based on its IPO, the company plans to tap into the emerging markets of Latin America and Africa and double its capacity in the next ten years. DP World owns 42 ports in 22 countries.
Mr Sharaf said the new funds would fuel that expansion, ruling out a secondary listing on another stock exchange in the “foreseeable future”.
He said: “If we listed on other markets, we would be a small player. Here we are going to be getting 1,000 per cent attention.”
DP World's final offer price will be determined by a process of bookbuilding. The sale of existing shares will close on November 15 and the company will list on the DIFX on November 26, according to sources.
Per Larsson, chief executive of Bourse Dubai, the holding company behind the DIFX and DFM stock exchanges, described DP World as an “anchor listing” that would encourage others to follow suit. Soud Ba'alawy, executive chairman of Dubai Capital, the investment arm of Dubai Holding which owns 20 per cent of Bourse Dubai, said there were more than 400 companies that could go public in the region with a market cap of between $5 billion and $20 billion. Source
The state-owned shipping giant, which bought the British company P&O last year, announced it would sell 2.822 billion shares in an initial public offering, priced between $1 and $1.30 each. The company retains the option of issuing an additional 498 million shares, representing a 20 per cent stake in total.
It is the first time a major domestic company has chosen to list on the DIFX, representing a major boost for Dubai's fledgeling global stock exchange. The listing is seen as a test for other state-owned companies that are considering a float to drum up capital, including Emirates, the airline owned by the royal family.
Mohammed Sharaf, chief executive of DP World, said: “We are the first jewel in Dubai's crown to go. This opens the way and it is something others will be looking at.”
Dubai-based tourist, real estate and shipping companies have been encouraged to seek local financing to fund ambitious expansion projects that will transform the tiny emirate into a capital markets hub.
Mr Sharaf said proceeds from the DP World float would be used to pay off a loan used to buy P&O. Valued at up to $21.6 billion, based on its IPO, the company plans to tap into the emerging markets of Latin America and Africa and double its capacity in the next ten years. DP World owns 42 ports in 22 countries.
Mr Sharaf said the new funds would fuel that expansion, ruling out a secondary listing on another stock exchange in the “foreseeable future”.
He said: “If we listed on other markets, we would be a small player. Here we are going to be getting 1,000 per cent attention.”
DP World's final offer price will be determined by a process of bookbuilding. The sale of existing shares will close on November 15 and the company will list on the DIFX on November 26, according to sources.
Per Larsson, chief executive of Bourse Dubai, the holding company behind the DIFX and DFM stock exchanges, described DP World as an “anchor listing” that would encourage others to follow suit. Soud Ba'alawy, executive chairman of Dubai Capital, the investment arm of Dubai Holding which owns 20 per cent of Bourse Dubai, said there were more than 400 companies that could go public in the region with a market cap of between $5 billion and $20 billion. Source
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