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UAE Central Cooling Systems (Empower) has announced its intention to conduct an initial public offering (IPO) and to list some of its ordinary shares on the Dubai Financial Market (DFM).
In a press conference today (Oct 24), Empower said it will issue 1 billion shares in the IPO at AED 0.10 (ten Phils) each, representing 10% of Empower’s total existing share capital.
The Emirates Group said that all the shares to be offered represent the sale of existing shares held by Dewa and Emirates Power, an indirect wholly-owned subsidiary of Dubai Holding, with Dewa selling 7% and Emirates Power selling 3%.
The selling shareholders reserve the right to modify the size of the IPO (in whole and/or individual portions) at any time before the end of the second tranche subscription period, subject to applicable laws and securities approvals, the company added and the Commodities Authority (SCA).
Subscriptions will open on October 31 and are expected to close on November 7 for UAE retail investors and November 8 for accredited investors.
The Shariah Supervisory Committee within UAE NBD Bank has issued a statement confirming that it believes the IPO is in compliance with Shariah principles.
The company’s existing share capital consists of 10 billion ordinary shares of AED 0.10 each, fully paid, issued and outstanding.
After this issuance, Empower plans to adopt a semi-annual dividend policy, and distributes dividends twice in April and October every year after this issuance.
The group expects to pay at least AED850 million in annual dividends for the first two financial years after the offering (April 2023 to October 2024).
Empower expects to distribute an initial dividend payment of at least AED425 million post-issue in the second half of 2022, by April 2023. After allocation in October 2024, the company expects to be based on commercial.
This dividend policy is designed to reflect the company’s expectations of strong cash flow and expected long-term earnings potential, while enabling the company to retain sufficient capital to meet ongoing operating needs and continue to invest for long-term growth.
The dividend policy is subject to the Board’s consideration of the cash management requirements of the Company’s business for operating expenses, financing expenses and expected capital expenditures.
In addition, the company expects the board to consider market conditions, the prevailing operating environment in the company’s market, and the board’s outlook for the company’s business.
Chairman Saeed Mohammed Ahmad Al Tayer said Empower’s continued ability to leverage its scale and knowledge qualifies the company for growth in markets where district cooling plays an important societal role.
“Central to our strategy is to support Dubai’s energy transition; by providing sustainable cooling solutions and improving energy efficiency, increasing water efficiency and encouraging responsible energy consumption. Empowering long-term principles to ensure inclusion, empowerment, diversity and gender equality .”
Ahmad bin Shafar, CEO, said: “With Dubai’s target market share of 80% by the end of 2022, Empower supports and benefits from the city’s fast-paced economic growth. This includes foundational Megatrends like facility expansion, population growth, and hotter climates, which will continue to accelerate the need for more efficient and sustainable large-scale cooling.”
“As a leader in implementing district cooling technologies in Dubai and deploying more sustainable methods of cooling, Empower offers investors a unique opportunity to invest in a company operating in a market with solid macroeconomic fundamentals in regional cooling , making it a growth engine for Empower,” he added.-TradeArabia News Service
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