DEWA has announced its plans to increase its offer size to 17 percent from 6.5 percent for strategic investors.
“The new offering of 8.5 billion ordinary shares implies a deal size of 17 per cent,” the Dubai utility company said in a statement.
Who gets what
* New strategic investors will receive around 7 per cent of the company’s share capital (representing approximately 3.50 billion shares) and with a lock-up of between 180 to 365 days.
* Balance of the offer size (including ‘cornerstone investors’ who came in earlier) is up from 6.5 per cent to 10 per cent of the share capital.
* The increase in offer size does not apply to retail investors.
The IPO was heavily over-subscribed from Day 1, with the offer opening on March 24. Retail investors had been keenly anticipating DEWA offering a higher stake – but they will not be getting any of the new shares being offered. (The retail tranche will remain unchanged at between Dh731 million to Dh806 million of the overall Dh7 billion-plus issue size.)
The hike in offer size follows approval from the UAE regulator, the Securities and Commodities Authority. DEWA “exercised its right to increase the number of shares offered” from 3.25 billion shares to 8.5 billion, which would result in a free float of 17 per cent of the entity’s share capital.
The Dubai Government will own the remaining 83 per cent. DEWA has also received regulator approval to increase the size of the tranche reserved for ‘qualified investors’ (which includes new ‘strategic investors) from 5.9 per cent (representing up to 2.925 billion shares) to up to 16.4 per cent of the company’s share capital (representing up to 8.175 billion shares).
An eye on ‘post-listing’
The higher offer size was determined by the Dubai government as the selling shareholder, following DEWA’s decision to set the offer price range per share between Dh2.25 and Dh2.48 per ordinary share on March 24. The offer period closes on April 2, and thereafter DEWA will announce the final offer price.
The hike in offer size provides “investors with a highly attractive value proposition that reflects the Government of Dubai’s long-term confidence in DEWA’s growth trajectory,” said a statement. “The decision also reflected DEWA’s prioritization of supporting after-market trading performance post-listing.”
Sameer Lakhani, Managing Director at Global Capital Partners, stated that the increase in offer size for strategic investors results in setting the stage for a healthy uptake for subsequent future listings and a rising regional and international appetite for such a blue-chip offering.
