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Dubai road-toll operator Salik to sell 20% shares via IPO – document

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DUBAI — Dubai road-toll operator Salik said on Monday it is selling 20% of the company via an initial public offering, and targets listing by the end of September.

Salik, which was converted into a private joint stock company in June, is selling 1.5 billion shares, according to prospectus document. The offer price will be confirmed on Sept. 22 and a listing is planned around Sept. 29, it said.

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The company is looking to raise around $1 billion for the shares, implying a valuation of $5 billion, sources told Reuters.

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Dubai launched its Salik electronic toll collection system in 2007 to ease congestion in the regional trading hub, which at the end of April had 3.6 million registered vehicles, of which 1.8 million were vehicles registered in Dubai.

Dubai’s deputy ruler, Sheikh Maktoum Bin Mohammed, had announced plans in November to turn Salik, then a division of the Roads and Transport Authority (RTA), into a public company. Listing it and nine other government-linked entities was intended to boost stock market activity.

The listing plans are aimed at making Dubai a more competitive market, with bigger bourses in Saudi Arabia and neighboring Abu Dhabi that are attracting larger listings and strong liquidity.

Gulf issuers have raised more than $11 billion in the first half of this year from IPOs, according to data from Refinitiv, exceeding European flotations even as global markets remain volatile in the wake of Russia’s invasion of Ukraine.

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Dubai Electricity & Water Authority in April raised $6.1 billion in its IPO, the biggest in the region since Saudi Arabia’s record deal in 2019.

Dubai business park operator TECOM Group in June raised 1.7 billion dirhams ($463 million) from investors via its initial public offering.

Salik, which means “open” or “clear” in Arabic, reported core earnings of 800 million dirhams ($217.82 million) in the first half of this year, compared with 637.41 million in the same period in 2021.

Its IPO has three tranches — one offered to individuals, the second offered to professional investors and the third to employees. 5% of the shares will be allocated to the Emirates Investment Authority, a federal sovereign wealth fund.

Dubai’s Emirates NBD, Goldman Sachs, and Bank of America are joint global co-ordinators on the deal, while Citigroup, Egypt’s EFG-Hermes and HSBC are joint bookrunners, the document said. ($1 = 3.6727 UAE dirham) (Reporting by Hadeel Al Sayegh; Editing by Muralikumar Anantharaman and Uttaresh.V)

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