Dubai seeks to raise as much as $454 million from Tecom IPO | World News

Dubai is seeking as much as $454 million from the initial public offering of business-park operator Tecom Group, forging ahead with the second listing this year in the government’s drive to deepen local capital markets.

State-owned Dubai Holding will sell 625 million shares in Tecom at 2.46 dirhams ($0.67) to 2.67 dirhams per share, according to an advertisement in Gulf News.

Tecom’s IPO is the second of 10 state-owned assets the Dubai government plans to list in a bid to boost sagging trading volumes and increase liquidity. The first of these share sales, Dubai Electricity & Water Authority’s $6.1 billion offering in April, drew overwhelming demand from both regional and international investors. 

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Since then, markets have taken a turn for the worse. The prospect of monetary policy tightening in an attempt to rein in runaway inflation is fueling fears of a recession and has pushed global stocks into a bear market. While Middle Eastern stocks have largely avoided the steep losses seen elsewhere thanks to high oil prices, local indexes have given up many of their gains since May.

Still, oil above $100 a barrel and equity inflows have helped the local IPO market plow on through the turbulence. They are already on track for their best first half on record, with almost $14 billion raised so far, data compiled by Bloomberg show. And companies have already started gauging investor interest in deals planned for after the summer. 

Tecom houses more than 7,500 companies and 10 large business complexes including Dubai Internet City and Dubai Media City. It is targeting an annual dividend payout of 800 million dirhams over the next three years. Tecom said the Gulf News advertisement that it paid a pre-offering dividend of 700 million dirhams to its selling shareholders in June.

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The company will take orders from retail investors until June 23 and from institutional buyers until June 24, with pricing set for June 27. The shares are expected to start trading on July 5.

Emirates NBD Bank, First Abu Dhabi Bank, Goldman Sachs Group Inc., Morgan Stanley and UBS Group AG are the joint global coordinators and joint bookrunners.

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