Dubai plans to sell a 20% stake in the initial public offering of its road-toll collection system Salik, the third planned privatization in the city’s program to boost sagging trading volumes.
(Bloomberg) — Dubai plans to sell a 20% stake in the initial public offering of its road-toll collection system Salik, the third planned privatization in the city’s program to boost sagging trading volumes.
The emirate’s government will sell 1.5 billion shares in Salik, according to an advertisement in Gulf News. The IPO is expected to raise about $1 billion, Bloomberg News reported last month.
The offering starts on Sept. 13, with an expected listing on the Dubai stock exchange on Sept. 29. Joint lead managers include Emirates NBD Capital, EFG-Hermes and HSBC Bank Middle East.
Salik’s IPO will test investor appetite after the summer in the Gulf, which saw record listing proceeds in the first half. But the elevated oil prices and equity inflows that buoyed regional markets have since come under pressure from concerns about a possible recession.
Read More: Dubai IPO Hopefuls Queue Up as Tougher Quarter Nears: ECM Watch
The deal is part of wider plans to list 10 state-owned firms in a bid to reverse years of falling trading volumes and catch up with neighboring Abu Dhabi and Saudi Arabia. Dubai had previously seen just one small IPO since 2017, while a string of high-profile delistings dented investor confidence.
It’s not all smooth sailing, with the first two privatizations yielding mixed results. Dubai Electricity & Water Authority has given up most of the early gains from its debut, while business park operator Tecom Group is trading 10% below its offer price.
Arabic for open, Salik is an automated system introduced in 2007. Each time a vehicle passes through one of the city’s toll points, 4 dirhams ($1.09) are charged to a prepaid account, eliminating the need for cash or toll booths.
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